Ayesha Mudassar

Cherat Cement Company Limited (CHCC) reported substantial growth in its financial performance in the first quarter of Fiscal Year 2025, with the gross profit and net profit increasing by 26% and 88%, respectively compared to the same period last year, reports WealthPK.

According to the results available with the Pakistan Stock Exchange (PSX), the company recorded a total revenue of Rs9.6 billion and a gross profit of Rs3.8 billion in the first quarter of FY25. The net profit reached Rs2.8 billion compared to Rs1.5 billion in 1QFY24, resulting in an earnings per share (EPS) of Rs14.81, up from Rs7.89 in 1QFY24. The company experienced a moderate decline of 4% in its net turnover compared to 1QFY24, with the revenue falling from Rs10 billion to Rs9.6 billion.

This reduction was primarily attributed to lower cement dispatches despite higher prices due to the increased input costs. In addition, the financial costs for the quarter declined 63% from Rs424.5 million to Rs155.2 million. This decline was mainly driven by the lower working capital requirements and scheduled payments of long-term loans. Cherat Cement Company Limited, which operates as a subsidiary of the Ghulam Faruque Group, is one of Pakistan’s leading cement manufacturers with a production capacity of 45,000 tonnes per day.

Sectoral Analysis- 1QFY25

The cement sector demonstrated a modest performance during 1QFY25, achieving 13% year-on-year (YoY) growth in earnings. The net profit for the period reached Rs32.4 billion compared to Rs28.5 billion in the corresponding period of the last fiscal year. To note, the compiled sector results include the performance of Cherat Cement Company Limited (CHCC), D.G. Khan Cement Company Limited (DGKC), Dewan Cement Limited (DCL), Fauji Cement Company Limited (FCCL), Flying Cement Company Limited (FLYING), Kohat Cement Company Limited (KOHC), Lucky Cement Limited (LUCK), Maple Leaf Cement Factory Limited (MLCF), Pioneer Cement Limited (PIOC), Power Cement Limited (POWER), and Thatta Cement Company Limited (THCCL).

According to WealthPK's analysis of the income statements of 11 PSX-listed cement companies, the sector saw an increase of 0.5 % in net sales, worth Rs206.3 billion compared to Rs205.4 billion in 1QFY24. On the cost front, the cost of sales declined by 1% YoY, standing at Rs145.8 billion in 1QFY25 compared to Rs147.03 billion in 1QFY24.

In addition, the sector paid a higher tax of Rs11.1 billion against Rs9.9 billion in the corresponding period of last year, depicting a rise of 12% YoY. During 1QFY25, LUCK beat its peers by recording the highest sales and net profit. The robust performance is mainly attributable to the company's strong focus on cost optimization, risk management, and innovation to deliver sustainable value to the stakeholders.

On the other hand, POWER and DCL are underperforming, with negative net profits. Both companies have actively pursued cost-saving initiatives to mitigate losses. However, factors including exorbitant input prices and escalating energy charges have adversely impacted their overall performance.

Credit: INP-WealthPk