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Kohat Cement

Kohat Cement to achieve financial close of announced green field expansion in next month: PSX

Lahore February 9 2022: In order to participate in current boom in cement industry management has announced further green field expansion of 7,800-10,000 TPD, near Khushab. Estimated cost of project is ~PKR 28bn out of which ~60 percent will be debt financed, as per document published by rating agency.

Financial Close of upcoming expansion is expected to be achieved by Mar-22.

Kohat Cement’s market share in north region rose to 9.6 percent after successful completion of brown-field expansion of 2.3 million tpa, last year. The Cement sector’s dispatches have recorded splendid growth and surged by 21 percent in FY21 as demand in the domestic market accelerated. Export is another avenue. Industry-wide exports have gone up as a new export window is created in the Bangladesh market.

BMR of Line-III is underway that would cost ~PKR 650 million, and will be financed through equity. Company’s leverging has reduced as the repayments of long term loan for line IV has started taking the debt/equity ratio in a comfortable position ~19 percent in 1QFY22 (FY21: 21.4 percent, FY20: 27 percent).

The company has an available short term limit of ~PKR 3.3 billion out of which ~86 percent remained unutilized which shows company’s low reliance on short term borrowings.

The industry’s future demand outlook is positive, in view of the infrastructure projects in the pipeline. The Company’s revenues witnessed an increase (1QFY22: PKR 6.8 billion, FY21: PKR 24 billion, FY20: PKR 11.3 billion) attributed to an uptick in sales volumes, positive price indicators and, reinvigorating economy.

Margins in 1QFY22 also improved on account of recently added more efficient Line-IV. Company aims to optimally utilize the recently expanded line IV, in order to cut off direct cost. The Company managed to recoup previous losses and reported profits of PKR 1.3 billion and PKR 3.5 billion in 1QFY22 and FY21 respectively.

Company own investment properties along with a significant amount of liquid assets having a book value of ~PKR 4.1 billion and ~PKR 5.3 billion respectively, which mitigates the financial risk factor to a large extent.

Kohat Cement, operates as the fourth largest cement manufacturer in the north region with total cement capacity of 5.3 million tons p.a. Kohat Cement, listed on PSX, is majority owned by ANS Capital (Pvt.) Ltd. (55 percent) – sponsor family’s majority owned company. The overall control of the company vests in eight member board of directors (BoD) including the chairman – Mr. Aizaz Mansoor Shiekh and the Chief Executive Officer, Mr. Nadeem Atta Sheikh.

Minister Seeks Timeline For Setting Up New Cement Plants

Pakistan: Provincial Minister for Industries and Commerce Mian Aslam Iqbal Monday asked the companies obtaining the No Objections Certificate (NOC) to give a timeline for setting up a new cement plant.
He was discussing the matter with representatives of companies obtaining the NOC for setting up new cement plants at the Civil Secretariat on Monday.

They discussed in details the progress regarding the timeline for setting up of new cement factories after the issuance of the NOC.

Some of the companies apprised the minister the reasons for the delay in establishment of new plants. The minister said that the company was bound to start work on establishing cement plant within six months after obtaining the NOC. He said that the provincial government had issued 10 NOCs for setting up of new cement factories to promote the construction sector and increase employment opportunities.

He said more NOCs would be issued after the approval by the cabinet.

The minister said that never in the history of the country had so many NOCs been issued in such a short span of time.

Mian Aslam Iqbal said that with the setting up of new cement factories, billions of rupees would be invested in Punjab. It is great that new industries were being set up in the province due to the government’s pro-industry policies.

Among the representative who called on the minister included Brig (retd) Syed Kausar Hussain of Bestway Cement, Asim Khawas Khan of Pioneer Cement, Syed Ahsanuddin of Fatima Cement, Muhammad Tariq of Fauji Cement Limited, Muhammad Ashraf of Maple Leaf, Khurram Shahzad of Kohat Cement, Annan Khan of DG Khan Cement and others.

Secretary Industry and Commerce Dr Wasif Khurshid, Additional Secretary Commerce and officers were also present.

Pakistan cement production rises 27% in 12MFY21

International news agency CEMNET reported, The overall output of the Large-Scale Manufacturing Industries Index (LSMI) in Pakistan increased by 14.9 per cent for July 2020-June 2021 compared to July 2019-June 2020, including local cement production, FBS estimated. Industry attributes the increase in production on the back of a boost in local demand by housing schemes.

During the last fiscal year of July 2020-June 2021, Pakistan’s cement production increased by 27.3 per cent, YoY to 49.803Mt compared to 39.121Mt in the preceding fiscal year. The upward trend in cement output was also noted in June 2021 alone, when it rose by 32.4 per cent to 4.666Mt versus 3.523Mt in the same month last year.

Kohat Cement returns to profit in 3Q

Pakistan’s Kohat Cement has posted a net profit of PKR1.059bn (US$6.92m) in the quarter ending 31 March 2021, compared with a PKR381.08m loss in the same period last year.

Total sales for the period advanced 163 per cent YoY to PKR6.71bn against PKR2.55bn in the 3QFY19-20. Record high industry dispatches and an increase in the company’s production capacity along with higher domestic retention all contributed to the overall growth during the period.

For the nine-month period ended 31 March 2021, the company recorded a net profit of PKR2.53bn compared with a PKR283.3m loss in the year-ago period.

Source : CEMNET