Cherat Cement (CHCC) announced 2QFY26 result on Wednesday wherein the company posted net earnings of Rs2bn (EPS Rs10.4) as compared to profit of Rs2.2bn (EPS Rs11.7) during the same period last year (down 11%YoY).
The result remained higher than our estimate mainly due to better gross margins. Along with the result, the company announced an interim cash dividend of Rs1.5/share.Cement Profits May Decline in 2QFY26
During 2QFY26, CHCC’s revenue increased to Rs9.4bn as compared to Rs10.6bn during the last year (down 11%YoY). The decrease in revenue is mainly led by lower retention prices.
CHCC’s gross margin remained flat at 36% during 2QFY25 as compared to the same period last year. The margins stabilized mainly due to reduction in international coal prices and efficient power mix , despite reduction in retention prices.
Finance cost stood at Rs102mn (down 55%YoY) mainly due to lower interest rates during the period.
Moreover, Operating expense increased to Rs576mn (up 10%YoY) despite revenue declining in the same period.
On a sequential basis, earnings decreased 4%QoQ on the back of decline in revenue (down 8%QoQ) during the period.
Cumulatively during 1HFY26, earnings decreased by 20%YoY on the back of 1) Reduction in retention prices 2) decline in margins (down 2pptYoY) and 3)Higher operating expense ( up 9%YoY)
