Cement Sector Profit Surges to PKR 22.4 bn

Islamabad: Pakistan’s cement sector has reported a record earnings growth of PKR22.4bn (US$58.18m), up 8% YoY in the 2QFY23-24. This significant increase in earnings is primarily due to the higher gross margins and other income generated by the sector.

According to Topline Pakistan Research, Lucky Cement (LUCK) was the major contributor to this profitability, followed closely by Bestway Cement (BWCL) and Fauji Cement (FCCL). Analysts also noted that despite a fall in cement dispatches, the cement sector made significant achievements.

The cement sector’s sales increased by 9% YoY to PKR 179 billion in the second quarter of FY23-24. This growth was driven by a 16% YoY increase in average cement prices. Despite a 12% YoY decline in local dispatches to 10.1 million tonnes during the same period, the overall decline in cement dispatches was limited to 1% YoY due to a 166% growth in cement exports.

The sector’s effective tax rate was 32% in the second quarter of the current fiscal year, which is higher than the previous year’s second quarter rate of 27% but lower than the first quarter of the current fiscal year’s rate of 35%.

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