Kohat: Kohat Cement Company Ltd. (KOHC) has reported a significant increase in their financial performance for the second quarter of the fiscal year 2025. The company announced earnings of PkR3.4 billion, translating to an earnings per share (EPS) of PkR17.6. This marks a 55% year-on-year growth from the previous year’s earnings of PkR2.2 billion (EPS: PkR11.4). The results have surpassed expectations due to stronger gross margins driven by lower cost of goods sold (COGS) and an increase in other income.

According to a statement by AKD Securities Limited, KOHC’s revenue rose by 2% year-on-year to PkR10.6 billion, up from PkR10.4 billion in the same period last year. This increase in revenue was primarily driven by an 11% year-on-year rise in retention prices, which helped mitigate the impact of an 8% decline in offtakes.

The company experienced a notable improvement in gross margins, which rose to 42.2% from 26.2% in the same period last year. This increase was attributed to several factors, including higher retention prices, a decline in coal prices, and lower grid rates, which account for over 30% of the company’s power reliance.

KOHC also reported a 32% year-on-year increase in other income, amounting to PkR1.6 billion, compared to PkR1.2 billion in the previous year. This rise was driven by a 53% increase in short-term investments, which more than compensated for a decline in interest rates.

The finance cost for the company saw a substantial decrease of 48% year-on-year, dropping to PkR94 million from PkR180 million. This reduction was due to a decrease in outstanding debt and easing interest rates.

The company’s effective tax rate increased to 37% during the second quarter of FY25, compared to 34% in the same period last year and 33% in the first quarter of FY25.

Overall, the company’s profitability for the first half of FY25 reached PkR6.9 billion (EPS: PkR35.2), reflecting a 55% increase year-on-year from PkR4.5 billion (EPS: PkR22.7).

AKD Securities Limited maintains a ‘BUY’ stance on KOHC, citing earnings growth from declining coal prices and improving cost efficiencies, such as increased reliance on solar power. They have set a target price of PkR537 per share for December 2025.

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