KARACHI: Kohat Cement Company Ltd. (KOHC) released its fourth-quarter financial results for fiscal year 2025, revealing earnings of PkR2.4 billion, equivalent to an earnings per share (EPS) of PkR2.6. This marks a 1% decrease compared to the same period last year, attributed to a decline in gross margins. The earnings were consistent with market expectations.

Revenue showed marginal change, remaining steady at PkR8.7 billion. The company experienced a 2% year-on-year increase in retention prices, which balanced out a 2% decrease in sales volumes.

Gross margins experienced a slight decline, falling to 31.2% from 31.8% in the same period last year. This decrease was primarily due to inventory adjustments, which impacted the margins more than anticipated.

Other income dropped by 1% year-on-year, totaling PkR1.3 billion. Lower yields affected the income, despite a 33% increase in cash and short-term investments.

The finance cost saw a significant reduction, decreasing by 44% to PkR80 million, down from PkR143 million in the same period last year. This decline was attributed to a reduction in outstanding debt and easing interest rates.

The company recorded an effective tax rate of 33% during the quarter, compared to 4% in the same period last year and 36% in the previous quarter.

Over the fiscal year 2025, Kohat Cement's profitability reached PkR11.6 billion, with an EPS of PkR12.6. This represents a 30% increase from the PkR8.9 billion (EPS: PkR9.7) recorded in the previous year.

AKD Securities maintains a 'BUY' recommendation for KOHC, citing earnings growth from declining coal prices, improved cost efficiencies, and a greater reliance on solar power. The target price for June 2026 is set at PkR158.6 per share.