• The cement sector (KSE100) saw a 36% YoY increase in profitability during 1HFY25, reaching PKR 56.0bn, up from PKR 41.1bn in the same period last year.
• Sales for the sector’s companies grew 4% YoY to PKR 297bn in 1HFY25. In 2QFY25, sector sales rose by 18% QoQ and 10% YoY. The increase in sales was driven by higher retention prices, with dispatches also rising by 2% YoY to 19.2mn tons in 1HFY25. In 2QFY25, dispatches grew by 13% YoY and 22% QoQ to 10.6mn tons.
• The sector’s gross margins improved to 34.6% in 1HFY25, mainly due to higher retention prices and stable coal prices.
• The sector’s other income increased by 37% YoY to PKR 16.0bn. The rise in other income was due to higher dividend income.
• The sector’s finance costs declined by 19% YoY to PKR 14.0bn due to the decline in interest rates.
• Cement prices saw a significant increase in 1HFY25, with prices in the North rising by 23% YoY to an average of PKR 1,481/bag, while in the South, prices grew by 18% YoY, averaging PKR 1,386/bag. However, by Feb’25, prices in the North have dropped by PKR 201/bag from its peak of PKR 1,530/bag, now averaging PKR 1,329/bag, largely due to weaker local demand.
• Meanwhile, coal prices declined by 2.1% YoY on average during the same period, contributing to improved gross margins across cement manufacturers.

Courtesy – AHL Research