AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: The cement sector in Pakistan experienced a substantial increase in earnings during the third quarter of fiscal year 2025, according to a recent analysis of eight key companies. Earnings surged by 2.3 times year-on-year, primarily driven by an expansion in profit margins and dividend income from subsidiaries. Notable contributors to this growth were MLPL and LEPCL, which provided dividends of approximately Rs5.6 billion and Rs6.0 billion, respectively, to companies MLCF and LUCK.
The sector observed a modest 2% year-on-year increase in local cement dispatches. The improvement in margins was largely attributed to the decline in coal prices in both the North and South regions, alongside enhanced cost efficiencies and higher retention prices. Despite this, a quarter-on-quarter analysis showed a 2.7 percentage point drop in margins, mainly due to a decrease in cement prices in the North.
Looking forward, expectations are high for further margin improvements. Recovery in cement prices, particularly in the North region where prices have risen by Rs60 per bag since February 2025, is anticipated to support this trend. Additionally, the continued low international coal prices are likely to benefit companies operating in the South.
The cement sector is expected to remain a focal point ahead of the fiscal year 2026 Federal Budget announcement. Anticipated increases in the Public Sector Development Program allocation and potential incentives for the real estate sector are likely to bolster local demand recovery prospects.