Karachi: Pakistan's cement industry is poised for a 9% year-on-year increase in profitability for the fourth quarter of fiscal year 2026, fueled by a rise in local volumetric sales, according to JS Global. The sector is expected to post a profit of Rs20.54 billion, up from Rs18.81 billion in the same quarter last year, despite a 10% decline compared to the previous quarter.
According to the press release, net sales are projected to climb to Rs116.32 billion for the quarter, marking a 23% increase from the previous year and a 10% rise from the preceding quarter. The growth in sales is attributed to higher cement prices and increased local cement dispatches, which have grown by 7% year-on-year. However, export dispatches have decreased by 22% year-on-year, largely due to the closure of the Afghan border.
The report notes that the cement prices have increased by approximately Rs100-110 per bag year-on-year, driven by elevated international coal prices. Richards Bay coal prices averaged around $113 per ton in the fourth quarter, up from $100 in the third quarter and $90 in the same period last year. Despite these challenges, the gross margin for the cement sector is expected to reach 35%, a slight improvement from the previous quarter but a decrease from the 37% margin recorded a year earlier.
Finance costs for the industry are anticipated to rise by 86% year-on-year to Rs4.48 billion, with Maple Leaf Cement accounting for a significant portion of this increase due to debt incurred for acquiring Pioneer Cement. Other income for the sector is estimated to fall by 2% year-on-year and 41% quarter-on-quarter.
The press release also highlights the performance of individual companies within the sector. Lucky Cement is expected to see a 25% year-on-year increase in consolidated earnings, driven by profitability in local cement and automobile segments. Kohat Cement is projected to post a 24% year-on-year increase in earnings, while Fauji Cement is expected to see a 10% rise. DG Khan Cement's earnings are projected to decline by 13% year-on-year, and Maple Leaf Cement is expected to report a 28% decrease in earnings due to lower other income.
Despite these mixed results, the sector is poised for dividend payouts, with both Fauji Cement and Lucky Cement expected to declare dividends for the quarter.