LAHORE: The country’s cement sector witnessed huge growth of 30.4 per cent to Rs 16.14 billion during second quarter of current fiscal year 2015-16.
Cumulatively, the sector now stands at Rs27.65b in first half of FY16 against Rs20.91b in the corresponding period last year, depicting a growth of 32.2 percent YoY. Revenues of the sector during 1HFY16 grew by an impressive 7.5 percent YoY (2QFY16: 12.0 percent YoY) on the back of impressive 16.3 percent YoY growth in local dispatches which more than compensated for 25.9 percent YoY drop in exports in volumetric terms (net loss of 1.05mn tons in exports against net increase of 2.13m tons in local dispatches) and stable pricing discipline.
At the same time, COGS per ton during the 1HFY16 also declined to Rs3,625/ton from Rs3,682/ton, owing to plummeting coal and electricity prices. Resultantly, margins of the sector during 1HFY16 clocked-in at a mammoth 40 percent (2QFY16: 41 percent) vis-à-vis 35 percent in the corresponding period last year mainly on account of depressed coal prices (R-Bay down 14 percent in FY16TD), declining electricity prices under monthly FPA and strong growth in local dispatches.
