Karachi: Kohat Cement Company Ltd. (KOHC) reported a significant rise in its first-quarter earnings for fiscal year 2025, achieving a record profit of PkR3.4 billion, up from PkR2.2 billion in the same period last year. This marks a 54% increase in year-over-year profits, with earnings per share rising to PkR17.6 from PkR11.4.

According to AKD Securities Limited, the impressive results were primarily driven by higher-than-expected gross margins, which benefited from reduced energy costs. Despite a 9% decline in sales to PkR10.1 billion, attributed to a 22% drop in offtakes to 0.59 million tons from 0.76 million tons last year, gross margins saw a considerable improvement.

Gross margins rose to 42.8% from 29.2% in the same period last year, bolstered by approximately a 17% increase in retention prices and a 20% decrease in grid tariffs, which favorably impacted the company’s power costs, given its approximately 65% reliance on the grid for energy. Other income for the quarter also increased by 70%, largely due to a 39% rise in cash and short-term investments.

Furthermore, finance costs during the quarter dropped by 54% to PkR116 million, following a 26% reduction in total outstanding debt. The effective tax rate for the quarter was lower at 33%, compared to 36% in the same period last year.