Lahore: Pioneer Cement Ltd. reported a 19% year-over-year decline in earnings for the third quarter of fiscal year 2025, attributed to contracting margins and higher costs. The company announced earnings of 974 million Pakistani Rupees (PkR), equivalent to an earnings per share (EPS) of PkR4.29, falling short of market expectations.

Revenue for the quarter decreased by 8% compared to the same period last year, totaling PkR7.9 billion. This downturn was primarily due to a 7% drop in offtakes, totaling 0.52 million tons, while retention prices remained largely stable.

Gross margins saw a contraction to 25.5% from the previous year's 32.0%, not meeting the anticipated 35.5%. Analysts are awaiting further details to understand the underlying factors contributing to this decrease.

Finance costs, however, showed a significant decline of 58% year-over-year, amounting to PkR286 million, supported by reduced interest rates and a 21% reduction in outstanding debt.

For the first nine months of FY25, the company's profitability reached PkR3.7 billion, marking a slight decline of 2% compared to the same period last year.

Sequentially, the company's quarterly profitability dropped by 44%, driven by reduced gross margins, a 7.3% decrease in retention prices, and a 4% decline in offtake volumes.

Despite the current challenges, analysts maintain a 'BUY' rating on Pioneer Cement, citing potential earnings growth from improving gross margins amid easing coal prices. The target price for December 2025 is set at PkR264 per share, indicating a potential upside of 28%, alongside a dividend yield of 6%.