Dewan Cement Limited closed the financial year ended June 30, 2026, with a narrower net loss, although a sharp increase in operating expenses pushed the company from an operating profit into an operating loss.
Net turnover increased to Rs24.99 billion from Rs21.41 billion a year earlier. However, the improvement in revenue translated into only a modest increase in gross profit, which rose to Rs1.59 billion from Rs1.55 billion.
As a result, the company’s gross margin remained broadly unchanged despite higher sales.
Operating Costs Erase Previous Year’s Profit
Dewan Cement faced significant pressure from higher operating expenses during FY2026.
Distribution, administrative and other operating expenses increased to Rs1.65 billion from Rs1.21 billion.
The increase was enough to reverse the company’s operating performance, with operating profit of Rs338 million in the previous year turning into an operating loss of Rs59 million in FY2026.
Finance costs eased slightly during the year. However, after accounting for levies of Rs312 million, the company’s pre-tax result moved from a profit of Rs84 million to a loss of Rs358 million.
Deferred Tax Credit Narrows Net Loss
A substantial deferred tax credit helped reduce the impact of the operating and pre-tax losses.
Dewan Cement recorded a deferred tax credit of Rs253 million in FY2026, compared with a deferred tax charge of Rs953 million a year earlier.
Consequently, the company’s net loss narrowed to Rs170 million from Rs968 million in FY2025.
Loss per share also improved, falling to Rs0.32 from Rs2.00.
Despite the narrower loss, the board recommended no cash dividend, bonus shares or rights issue.
Revaluation Boosts Asset Base and Equity
Dewan Cement’s property, plant and equipment increased to Rs55.11 billion from Rs43.49 billion following an Rs8.59 billion revaluation surplus recognized in other comprehensive income.
The revaluation contributed to an increase in total equity, which rose to Rs33.50 billion from Rs24.48 billion.
The company’s paid-up capital also increased by Rs600 million after 60 million shares were issued at par against an outstanding interest-free loan.
Meanwhile, cash and bank balances more than doubled to Rs361 million.
Working Capital Absorbs Cash
Although Dewan Cement remained cash-generative from operations, its operating cash inflow weakened during the year.
Operating cash inflow declined to Rs481 million from Rs1.01 billion a year earlier.
The reduction was attributed to working capital absorption, particularly through stores, stock and receivables.
Audit Qualifications Remain
The company continued to face concerns highlighted by its auditors.
Auditors issued a qualified opinion regarding the non-provision of markup and the classification of certain liabilities as non-current.
They also highlighted material uncertainty surrounding Dewan Cement’s ability to continue as a going concern.
The audit observations remain an important consideration alongside the company’s improved bottom-line result and higher equity following the asset revaluation.
Dewan Cement Annual General Meeting Set for October 26
Dewan Cement’s annual general meeting is scheduled to take place on October 26, 2026, in Karachi.
The company’s share transfer books will remain closed from October 19 through October 26.
While the company reported a significantly smaller annual loss, its FY2026 results continued to reflect pressure from elevated operating expenses, working capital requirements and the issues identified by its auditors.