Higher coal price along with increase in FED to curb gross margins
Despite increase in cement price in North, gross margin of cement manufacturers in region is expected to remain dull due to robust coal price during the quarter and increase in Federal Excise Duty (FED). To recall, the government increased FED for FY19 by PKR 12.5/bag which is expected to cut retention price. Moreover, the coal price during the quarter remained ~21% YoY higher along with depreciated PKR which pushed coal prices further high in PKR terms. Note that average cement price of PKR 577/bag in Northern region during 1QFY19 remained ~ PKR 30/bag higher compared to SPLY, however, we don’t expect any positive net impact from cement price hike.
Bestway Cement. Bestway Cement Limited is a Pakistan-based company, which is engaged in the production and sale of cement. The Company's products include Ordinary Portland Cement, Sulphate Resistant Cement, Quick Setting Cement, Low Alkali Ordinary Portland Cement and Clinker. The Company supplies these products either in standard packaging, in bulk or packaged according to customers' requirements. The Company exports its products to various markets, including Sri Lanka, Africa, the Middle East and Central Asia. The Company is a subsidiary of Bestway (Holdings) Limited, which is engaged in global banking, wholesale cash and carry business, a string of retail outlets, real estate investment, ethnic food and beverage import and distribution, and milling of rice.
Fauji Cement is engaged in the manufacturing and marketing of cement.
Maple Leaf Cement Factory is engaged in the production and sale of white cement, grey cement and clinker. Co. is a subsidiary of Kohinoor Textile Mills Limited.
Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.
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