Report
Rahul Hans

Pakistan Cements: 3QFY20 preview – the worst is not over yet

With a backdrop of lower retention prices, higher input costs, elevated finance costs and infighting among North-based producers, profitability of IMS cement universe is likely to remain depressed in 3QFY20, with an estimated cumulative net losses of PKR2.5bn.
Almost all producers – including the less leveraged FCCL and KOHC – alongside CHCC, MLCF and DGKC are likely to book losses in 3Q amid (i) further compression of retention prices qoq (ii) increased competition, (iii) higher coal prices ...
Underlyings
Cherat Cement Co.

Co. is engaged in the manufacturing and marketing of cement and clinker.

D.G. Khan Cement Co.

Co. is engaged in the production and sale of Ordinary Portland and Sulphate Resistant Cements.

Kohat Cement Co. Ltd.

Kohat Cement Company Limited. Kohat Cement Company Limited is a Pakistan-based company, which is engaged in the production and sale of cement. The Company's products include Grey Cement and White Cement. The Company offers Ordinary Portland Grey Cement under the brand name KOHAT CEMENT. The Company produces and sells White Portland Cement under the brand name KOHAT SUPER WHITE. The Company also offers white canvas for various architectural applications. The Company's white canvas is used for concreting and ornamental applications, terrazzo floorings, fixing of tiles and marbles, and others. The Company's White Portland Cement is available in all local markets in Pakistan and Afghanistan. The Company has an annual production capacity of 2.8 million tons of Grey Cement and 150,000 tons of White Cement. The Company produces both Grey and White Cements at its plants located in Rawalpindi Road, Kohat.

Lucky Cement Ltd.

Lucky Cement is a cement manufacturing and distribution company which is based in Pakistan. Co. is engaged in the manufacture and sale of Ordinary Portland, Sulphate Resistant, and Slag Cement. Co.'s brand names included Lucky Cement, Lucky Star, Lucky Gold, Chairman, and Lucky Sulphate Resistant Cement. Co. maintains production facilities in Pezu (Production capacity: 13,000 tons per day) as well as in Karachi (Production capacity: 8,000 tons per day). In addition, Co. is engaged in developing export markets for bulk loose cement from Pakistan to the Gulf Countries, African Markets, and Far East Region including Nepal & Sri Lanka.

Provider
Tellimer
Tellimer

Tellimer provides an integrated suite of services focused on the world's developing markets. It offers world class investment research and local insights; end-to-end content distribution and analytics; market execution and corporate access; brokerage services across Fixed Income and Equities; and expert advisory services.

Tellimer is headquartered in London, UK, with additional offices in Dubai, Lagos, Nairobi, New York and Singapore. It is a division of Exotix Partners LLP.

Analysts
Rahul Hans

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