Karachi: Cherat Cement Company Ltd. (CHCC) has reported a 27 percent year-on-year decline in profitability for the first quarter of the fiscal year 2026, as per the company's financial results. The cement manufacturer registered a profit of PKR2.1 billion, translating to earnings per share of PKR10.79, down from PKR2.9 billion, or PKR14.81 per share, during the same period last year.

Despite a 6 percent increase in revenue, which rose to PKR10.3 billion, the company faced setbacks in profitability. This revenue growth was driven by a 19 percent year-on-year increase in sales volumes, which managed to outweigh the impact of a 14 percent decline in retention prices.

Gross margins fell from 40.0 percent in the same period last year to 36.3 percent, primarily due to an increase in royalty rates in the Khyber Pakhtunkhwa region. The royalty rates rose significantly to PKR350 per ton, up from PKR250 per ton in the same period last year.

Operating expenses saw a 7 percent increase, largely attributed to an 11 percent rise in administration costs. Meanwhile, other income remained stable at PKR348 million, as declining interest rates counterbalanced the effects of higher short-term investments.

The company’s earnings exceeded expectations due to higher-than-anticipated margins, despite the challenging economic environment and increased costs. The financial results were analyzed and provided by AKD Securities Limited.