Pakistan’s leverage-laden cement industry is poised to turn in its strongest June-quarter earnings in four years, according to a fresh preview by Topline Securities. The brokerage projects aggregate after-tax profit for its five-company universe at Rs17.8 billion for 4QFY25, a leap of 38% year-on-year that more than offsets a lacklustre domestic demand backdrop. The upgrade rests on three pillars: sharply lower finance costs, a surprise bounce in exports, and another round of incremental price rises at the retail end.
Net revenue is expected to rise 8% YoY to Rs96.7 billion, reflecting a mix of higher retention (ex-factory) prices and better realised dollar prices on outbound cargoes to Sri Lanka, East Africa and the Gulf. Equally important, interest expense across the universe is seen sliding 25% YoY to Rs3.6 billion as a string of State Bank rate cuts feed through to floating-rate debt and several producers use free cash‐flow to pay down working-capital facilities.
For context, finance charges devoured more than one-third of sector earnings in FY23 when the policy rate peaked at 22%. Topline’s arithmetic implies the interest bite is now back in single digits – a game-changer for an industry whose expansion spree was funded largely with rupee loans. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
