Pioneer Cement Posts Strong Q2 Results, Announces First Dividend Since 2018

Islamabad, Pioneer Cement Limited (PIOC) has reported a significant increase in its earnings for the second quarter of fiscal year 2024, with results surpassing market expectations amid healthy gross margins and reduced finance costs. The company announced earnings of PKR 1.7 billion (EPS: PKR 7.45) for 2QFY24, an 81% increase from the preceding quarter, outperforming consensus estimates. This performance marks a notable turnaround, highlighted by the declaration of a half-yearly cash dividend of PKR 5.0 per share, the first since June 2018.

According to AKD Securities Limited, net sales for Pioneer Cement rose to PKR 10.1 billion from PKR 8.7 billion in the previous quarter, driven by a 12% quarter-over-quarter increase in sales volumes and a 6.9% rise in retention prices. The improvement in gross margins to 34.5% from 30.4% in 1QFY24 was primarily due to higher retention prices and potentially lower weighted average costs of coal, thanks to efficient coal procurement and mix optimization strategies.

The company also saw a significant reduction in finance costs, which decreased by 34% quarter-over-quarter and 27% year-over-year to PKR 626 million, primarily due to reduced borrowings. Total debt declined to PKR 16.2 billion as of the accounts for September 2023, compared to PKR 21.7 billion at the end of September 2022.

Cumulatively, for the first half of fiscal year 2024, Pioneer Cement's earnings reached PKR 2.6 billion (EPS: PKR 5.0), up 49% year-over-year, mainly attributable to the expansion in gross margins. The announcement of an interim dividend of PKR 5.0 per share, with a half-year payout ratio of 43%, marks a significant development for the company and its shareholders, reflecting confidence in its financial health and operational efficiency.