Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained its ratings for Bestway Cement Limited, affirming both its long-term and short-term ratings at ‘AA-‘ and ‘A1+’ respectively, with a stable outlook, mirroring assessments from the previous year.

According to The Pakistan Credit Rating Agency Limited, Bestway Cement has reinforced its market leadership in the northern region through strategic capacity expansions completed in fiscal year 23. These expansions include a new Greenfield cement plant and a Brownfield production line, each adding 7,200 tonnes of clinker per day, alongside a 9 MW Waste Heat Recovery Power Plant. This enhancement boosts the company’s total manufacturing capacity to approximately 15.3 million tons per annum.

In fiscal year 24, industry-wide cement dispatches slightly increased by 1.6%, totaling 45.3 million tons, buoyed by a significant 54% rise in export volumes. Bestway mirrored this trend with a 52% growth in its export dispatches. However, the domestic market saw a 5% decline in dispatches, which Bestway countered with a 5% increase in its own domestic sales due to its expanded production capacity.

The company reported a gross turnover of PKR 145.6 billion for fiscal year 24, a 21% increase over the previous year’s PKR 120 billion. This revenue growth was driven by a 6% rise in volumetric sales combined with higher selling prices, necessitated by sharp rises in input costs, allowing the company to maintain its profit margins.

Financial charges for Bestway rose by approximately 65% to PKR 11.2 billion, attributed to higher interest rates and increased borrowings linked to its expansion projects. Nonetheless, net profit grew by 16%, from PKR 11.892 billion to PKR 13.769 billion, maintaining a steady net margin close to 13.2%.

Bestway’s financial strategy is also bolstered by sustainable dividend income from its 8.17% stake in United Bank Limited (UBL). The company’s financial structure reflects a reliance on both long-term debt for expansion and short-term debt for managing working capital, impacting its leverage and coverage ratios.

PACRA’s assessment emphasizes Bestway’s robust market position and the strategic backing of the Bestway Group, suggesting continued resilience in its business performance despite economic pressures and demand challenges.