Karachi, Pakistan's cement industry reported a mixed set of financial results for the second quarter of the fiscal year 2024 (2QFY24), reflecting a blend of challenges and achievements amidst fluctuating economic conditions. Leading companies in the sector experienced varied performance levels, attributed to factors such as sales volume changes, energy price fluctuations, and retention price adjustments.
According to AKD Securities Limited, Maple Leaf Cement Factory (MLCF) is projected to announce a net profit after tax (NPAT) of PkR1.7 billion for 2QFY24, marking a 7% quarter-on-quarter (QoQ) increase, primarily driven by topline expansion. The report anticipates a modest 5% QoQ increase in the company's revenue, reaching PkR17.6 billion, thanks to a 5.3% quarterly rise in retention prices, despite stable sales volumes at 1.06 million tons.
Fauji Cement Company Ltd. (FCCL) is expected to report earnings of PkR2.4 billion, a 7% decline from the previous quarter, with revenues slightly decreasing to PkR20.2 billion. The slight shrinkage in gross margins to 30.9% is attributed to an uptick in coal prices.
D.G. Khan Cement Company (DGKC) stands out with an expected 33.7% QoQ earnings growth, driven by a significant boost in export volumes. The company's revenue is projected to rise by 12.3% QoQ, reaching a gross margin of 19.1%, slightly down from the previous quarter due to the lower margin nature of export sales.
Cherat Cement Company (CHCC) is likely to see a 6.2% QoQ earnings decline, with gross margins contracting to 29.0% due to increased energy costs. Yet, revenue is expected to increase by 3% QoQ, reaching PkR10.3 billion.
Pioneer Cement Ltd. (PIOC) is anticipated to report a 20% QoQ earnings increase, with a notable topline expansion leading to an expected NPAT of PkR1.1 billion. Sales volume growth and retention price increases are cited as the primary drivers, despite a forecasted contraction in gross margins.
Kohat Cement Company Ltd. (KOHC) is expected to maintain its earnings level QoQ, with an estimated EPS of PkR11.4. The company's performance is buoyed by increased retention prices, balancing out a 10% QoQ decline in sales volumes.
These results underscore the cement sector's resilience and adaptability in the face of economic headwinds, including fluctuating energy prices and interest rates. The industry's ability to navigate these challenges while capitalizing on opportunities for growth, such as export market expansions and retention price strategies, reflects its crucial role in Pakistan's economy.