Bestway Cement Sees 73% Profit Surge in FY25 Despite Market Challenges

Islamabad: Bestway Cement Limited (BWCL) announced a significant 73% year-over-year increase in profit for the fiscal year 2025, reaching PkR23.9 billion (EPS: PkR40.0), compared to PkR13.8 billion (EPS: PkR23.1) in FY24. This substantial growth comes despite a 1.7% decline in total sales volume and a challenging market environment. The company attributes the improved financial performance to a 5% increase in net retention prices and a 32% reduction in finance costs due to debt reduction and lower interest rates. Other income also saw a remarkable 2.3-fold surge, driven by increased profit from associated company.

Domestic sales volume decreased by 1.8% year-over-year for BWCL, while the overall industry experienced a steeper decline of 3%. As a result, BWCL’s local market share edged up to 18.1% in FY25 from 17.9% in FY24. Capacity utilization, however, dipped slightly to 44.7% from 45.4% in the previous financial year. Current retention prices stand at PkR15,200/ton, below the previous year’s level due to weak demand and intensified competition. Management expects domestic cement prices to rebound to last year’s levels.

BWCL’s current fuel strategy consists of a 60-70% local coal mix, supplemented by imported coal, primarily from Afghanistan. The firm’s current energy mix comprises 45% grid electricity, 25% solar power, and the remaining from Waste Heat Recovery (WHR). Solar capacity has expanded to 112MW from 105MW in FY24, nearing full utilization. While further capacity expansion is limited, the company is evaluating solar battery storage solutions.

Exports are not projected to grow due to uncertainties surrounding the border situation with Afghanistan, BWCL’s sole export market. The cement manufacturer anticipates a 1-2 percentage point improvement in gross margins in FY26, contingent on utilization levels. BWCL’s bid for the acquisition of ACPL did not advance, with management citing high valuations. The stock is not currently under formal coverage by AKD Securities.