Kohat Cement’s Q1FY26 earnings slip 14%

October 28, 2025 (MLN): Kohat Cement Company Limited (PSX: KOHC) reported a profit after taxation of Rs2.94bn for the quarter ended September 30, 2025, down 14.4% from Rs3.44bn in the corresponding quarter last year.

Earnings per share declined 8.8% to Rs3.2 compared to Rs3.51 in Q1FY25.

Net sales increased marginally by 2% year-on-year to Rs10.29bn from Rs10.08bn, demonstrating steady demand during the quarter. Cost of sales rose 17.8% to Rs6.80bn from Rs5.77bn.

Gross profit contracted 19.1% to Rs3.49bn against Rs4.31bn in Q1FY25, with the gross margin declining significantly to 33.9% from 42.8% in the prior year quarter, reflecting substantially higher production costs relative to sales growth.

Selling and distribution expenses increased 5.5% to Rs48.8m, while administrative and general expenses declined marginally by 0.1% to Rs180.6m.

Other expenses declined 18.3% to Rs229.1m from Rs280.3m last year.

The company recorded an operating profit of Rs3.06bn, down 19.6% from Rs3.8bn in Q1FY25.

Other income remained relatively flat, declining marginally by 0.2% to Rs1.47bn. Finance costs decreased 65.7% to Rs39.6m from Rs115.6m, providing significant relief to the bottom line.

Profit before taxation decreased 13% to Rs4.47bn from Rs5.14bn in Q1FY25.

Taxation declined 10.3% to Rs1.53bn from Rs1.71bn in the prior period.

The company concluded Q1FY26 with a net profit of Rs2.94bn, delivering a net profit margin of 28.6% compared to 34.1% in Q1FY25. The profit decline was driven by severe margin compression due to substantially higher cost of sales and lower operating profit, partially offset by significantly reduced finance costs and stable other income.

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