Cement industry riding a profit boom but bracing for a softer quarter

Pakistan’s 15 publicly listed cement makers closed the January‑to‑March 2025 quarter (3QFY25) with after‑tax earnings of Rs33.7 billion, up 89 percent year‑on‑year but 3 percent lower sequentially, according to a sector update circulated by Topline Securities last week. The disconnect between a spectacular year‑on‑year surge and a modest quarter‑on‑quarter dip is emblematic of the push‑and‑pull forces shaping the industry: better fuel economics and rising exports on one side, softer local demand and easing selling prices on the other.

Dispatch numbers tell the same story. Total sales volume slipped 7 percent QoQ to 11.0 million tonnes as the post‑winter construction lull arrived earlier than usual, yet was still 4 percent higher than the same period last year thanks to a 19 percent YoY jump in exports.

Sector revenues fell 15 percent QoQ to Rs168.2 billion even though they inched 6 percent higher YoY. The culprit was a pull‑back in average bag prices in the dominant North zone, down to Rs1,360 from Rs1,447 in the preceding quarter, as mills competed for shrinking retail demand once public‑sector projects hit funding constraints. Southern mills held the line at Rs1,382, barely a whisker below the previous quarter.

Gross margins nonetheless expanded 2.9 percentage points YoY to 29.7 percent, cushioned by cheaper coal and a more diversified fuel mix – northern plants leaned on Afghan and local coal while southern peers tapped South Africa’s Richards Bay cargoes that have slipped another 5 percent QoQ.