Pioneer Cement Ltd. (PIOC) announced its 2QFY26 financial results, reporting earnings of PkR1.6bn (EPS: PkR7.0), down 9%YoY from PkR1.7bn (EPS: PkR7.7) in SPLY. The said decline is primarily attributed to lower retention prices and higher coal costs. Earnings came in line with our expectations; however, the company skipped a dividend, which was not in line with our expectations.

·        Revenue increased by 15%YoY to PkR10.3bn from PkR8.9bn in SPLY, primarily due to 28%YoY increase in offtakes to 0.7mn tons. However, a 10%YoY decrease in retention prices partially offset the volumetric growth.

· Gross margins contracted to 29.6% from 41.7% in SPLY, due to the aforementioned decline in retention prices and higher weighted-average. coal cost due to the increased mix of Richards Bay coal amid the Afghan border closure.

·        Finance cost fell by 49%YoY to PkR179mn, compared to PkR347mn in SPLY, driven by easing interest rates and reduced outstanding debt.

·        Other Income increased by 6.6x to PkR168mn, compared to PkR25mn in SPLY, primarily due to 54%YoY increase in avg. cash & ST investments.

· Notably, the company skipped the half-yearly dividend payout, likely due to the ongoing acquisition by MLCF.

·        This brings 1HFY26 profitability to PkR2.9bn (EPS: PkR12.7), an increase of 4%YoY from PkR2.7bn (EPS: PkR12.2) in SPLY.

·        We maintain our ‘NEUTRAL’ stance on the PIOC, as we believe the impact of demand recovery and margin improvement is largely priced in. Our Dec’26 target price on the scrip is PkR372/sh.

Full Report

https://research.akdsl.com/639064141852408860.pdf

Courtesy: AKD Research