Karachi, Kohat Cement Company Limited and Cherat Cement Company Limited released their financial results for the third quarter of FY24 today, showing contrasting performances due to varying operational challenges.

According to AKD Securities Limited, Kohat Cement posted earnings of PkR2.1 billion for the quarter, a decrease of 7% quarter-over-quarter, primarily due to lower cement offtakes. Despite a decrease in sales volumes to 0.56 million tons from 0.69 million tons in the previous quarter, the company's gross margins improved to 29.9% from 26.2% in 2QFY24, attributed to an improved coal mix and operational efficiencies. However, other income declined by 10% year-over-year to PkR1.1 billion, largely due to a decline in average KIBOR rates. Overall, the earnings for 9MFY24 reached PkR33.2 per share, marking a 21% increase year-over-year.

On the other hand, Cherat Cement reported a more significant decline, with earnings dropping 33% quarter-over-quarter to PkR1.2 billion. The company faced a gross margin contraction and lower sales volumes, which decreased by 14% quarter-over-quarter to 0.59 million tons. The contraction in gross margins to 29.6% from the previous quarter was likely due to an upward revision in gas prices, which comprise approximately 45-50% of the company's power mix. Despite these challenges, Cherat Cement’s finance costs decreased by 17% quarter-over-quarter to PkR321 million, contributing to a slight year-over-year increase in earnings for 9MFY24 to PkR4.6 billion, or PkR23.9 per share.

Both companies continue to navigate a challenging economic landscape marked by fluctuations in input costs and market demand, reflecting broader trends in the construction and cement industries.