Flying Cement Company Limited: performance and outlook

Flying Cement Company Limited (PSX: FLYNG) was incorporated in Pakistan as a public limited company in 1992. The company is engaged in the manufacturing, marketing and sale of cement.

Pattern of Shareholding

As of June 30, 2026, FLYNG has a total of 694.80 million shares outstanding which are held by 3749 shareholders. Company’s directors, CEO and their children have the majority stake of 50.76 percent in the company followed by local general public holding 47.28 percent shares. The remaining ownership is distributed among other categories of shareholders.

Financial Performance (2021-26)

During the period under consideration, FLYNG’s topline plunged only in 2023. Its bottomline which was in the negative zone in 2020 turned out positive in 2021 and incredibly recovered in 2022. In 2023 and 2024, the bottomline weakened but stayed in the positive zone. It then posted staggering growth in 2025 only to descend in 2026.

FLYNG’s follow the same trajectory as its bottomline except for an uptick in operating margin in 2026. The detailed performance review of the period under consideration is given below.

In 2021, FLYNG’s topline posted a staggering year-on-year rise of 196.96 percent to clock in at Rs.3205.73 million. This was on account of continued efforts put in place by the government to boost the real-estate sector; revival of CPEC activities as well as low discount rate which encouraged investors to park their savings in the sector.

FLYNG’s dispatches grew by a robust 346 percent growth to clock in at 388,157 metric tons in 2021. Capacity utilization also jumped up to 55 percent and 43 percent for cement and clinker plants respectively in 2021. Cost of sales grew by 88.26 percent year-on-year in 2021.

The company posted a gross profit of Rs.302.94 million in 2021 versus gross loss of Rs.462.38 million recorded in 2020. GP margin clocked in at 9.45 percent as the company increased its prices during the year.

FLYNG was able to trim down its operating expense by 2 percent in 2021 by cutting down its legal & professional charges, communication charges as well as fee & subscription charges.

The contraction of these charges offset the higher payroll expense incurred during the year as FLYNG’s workforce expanded to 544 employees in 2021. Higher sale of trees, scrap and damaged stock pushed other income up by 10.88 percent in 2021.

FLYNG posted operating profit of Rs.325.37 million in 2021 with OP margin clocking in at 10.15 percent. Finance cost slid by 10.36 percent in 2021 on account of lower discount rate. The company posted net profit of Rs.143.68 million in 2021 with EPS of Rs.0.38 and NP margin of 4.5 percent. This was against the net loss of Rs.530.72 million and loss per share of Rs.3.02 recorded in 2020.

The ascending journey of FLYNG’s topline continued in 2022 with 66.46 percent year-on-year rebound to clock in at Rs.5336.13 million. This came on the back of 35 percent rise in its off-take which clocked in at 522,881 metric tons in 2022. Economic activities continued to pick up post COVID-19 buttressing the construction and real-estate sector.

In line with rising demand, FLYNG operated its cement and clinker plants at 63 percent and 76 percent capacity respectively. While there was an upsurge in demand in 2022, there were grave downside risks to company’s performance which included political headwinds, Russia-Ukraine crisis, sharp appreciation of electricity tariff, fuel & energy prices as well Pak Rupee depreciation. Yet, FLYNG was able to significantly drive up its GP margin to 16.34 percent by raising its prices and also by the adoption of Waste Heat Recovery Power Plant which rendered significant cost saving in power consumption.

Operating expense escalated by 40 percent year-on-year in 2022 due to higher payroll expense, utility charges, fee & subscription charges as well as donations. Higher profit related provisioning pushed up the other expense by 125.86 percent in 2022; however, no creditors written back during the year resulted in 17.62 percent lesser other income recognized during the year.

Operating profit magnified by 153.96 percent in 2022 with OP margin climbing up to 15.50 percent. Finance cost surged by 60.58 percent in 2022 on account of high discount rate although there was a slump in external borrowings during the year. Net profit magnified by 544.54 percent year-on-year in 2022 to clock in at Rs.926.10 million with EPS of Rs.1.33 and NP margin of 17.36 percent.

FLYNG’s net sales succumbed to geopolitical, economic and political uncertainties and tumbled by 20.48 percent year-on-year to clock in at Rs.4243.53 million in 2023. Destructive floods in the beginning of the year also halted the construction and infrastructure related activities in the southern region of the country, impeding the cement demand.

FLYNG’s dispatches dwindled by 37 percent year-on-year in 2023 to clock in at 329,211 metric tons. Capacity utilization also shrank to 42 percent and 44 percent for cement and clinker plants respectively in 2023. Constant currency depreciation, high inflation as well as hike in energy tariff didn’t allow FLYNG’s cost of sales to slide down by the same magnitude as its net sales, resulting in 33.84 percent leaner gross profit and GP margin slipping down to 13.60 percent in 2023.

Operating expense spiked by 15.98 percent year-on-year in 2023 on account of a considerable rise in payroll expense, directors’ remuneration, advertisement and communication expense incurred during the year. Other expense dived down by 39.93 percent in 2023 owing to lesser provisioning done for WWF and WPPF. Other income ticked up by 5.18 percent in 2023 on account of higher sale of trees, scrap and damaged stock.

Operating profit narrowed down by 34.86 percent year-on-year in 2023 with OP margin plunging to 12.68 percent. Finance cost swelled by 46.40 percent year-on-year in 2023 due to excessive monetary tightening and increased borrowings. As a consequence, net profit weakened by 70.71 percent year-on-year in 2023 to clock in at Rs.271.25 million with EPS of Rs.0.39 and NP margin of 6.39 percent.

FLYNG’s net sales ticked up by 6.44 percent to clock in at Rs.4516.63 million in 2024. This came on the back of higher cement prices as dispatches dwindled by 4.36 percent to clock in at 314,854 metric tons in 2024.

Lower dispatches was the result of severe monsoon rains which greatly damaged the country’s infrastructure, spiking fuel prices, depleting foreign reserves, mounting foreign debt and exorbitant level of inflation. Capacity utilization slightly increased to 47 percent for the clinker plant and 44.65 percent for cement plant in 2024 as the company strategically planned to operate at an optimum level.

Higher fuel prices resulted in 14.20 percent spike in cost of sales in 2024. This pushed down the gross profit by 42.90 percent in 2024 with GP margin shrinking to 7.29 percent. Operating expense surged by 15.97 percent in 2024 due to higher payroll expense, travelling expense and advertising & promotion expense incurred during the year.

Number of employees increased from 540 in 2023 to 553 in 2024. This was because the company was in the process of completing its Clinker line-II which demanded additional human resources. Lower profit related provisioning was the cause of 3.49 percent drop in other expense in 2024. Conversely, other income strengthened by 259 percent in 2024 due to higher sale of scrap, trees, damaged stocks and agricultural products.

Operating profit thinned down by 4.80 percent in 2024 with OP margin dropping to 11.35 percent. Finance cost surged by 6 percent in 2024. Net profit descended by 81 percent to clock in at Rs.51.45 million in 2024. This translated into EPS of Rs.0.48 and NP margin of 1.14 percent in 2024.

In 2025, FLYNG posted a phenomenal 148 percent stronger net sales to the tune of11,202.40 million. This came on the back of improvement in the economic activity of the country, decline in inflation and stable currency rate. Rising population and increased government spending on PSDP and mega projects also buttressed cement demand in the country. The company dispatched 741,458 metric tons of cement in 2025, up 135.49 percent year-on-year.

Capacity utilization was recorded at 90.60 for clinker plant and 89 percent for cement plant in 2025. Cost of sales surged by 127.13 percent in 2025 due to rising coal and electricity prices, however, with the increase in market price, the company was able to record 413.66 percent stronger gross profit in 2025 with GP margin mounting to 15.11 percent. Operating expense escalated by 198 percent in 2025 due to higher payroll expense, insurance expense, fines & penalties, travelling & conveyance expense and greater provisioning done for doubtful debts.

Greater provisioning done for WWF and WPPF translated into 285.62 percent hike in other expense 2025. Other income deteriorated by 64.53 percent in 2025 due to no sale of agricultural products and lesser sale of trees, scrap and damaged stock. Operating profit strengthened by 156.82 percent in 2025 with OP margin jumping up to 11.75 percent. Lower discount rate pushed down finance cost by 38.19 percent in 2025.

Net profit multiplied by 1161.15 percent to clock in at Rs.648.823 million in 2025. This translated into EPS of Rs.0.93 and NP margin of 5.79 percent in 2025.

In 2026, FLYNG’s net sales further enhanced by 29.63 percent to clock in at Rs.14,521.21 million. This was on the back of stable macroeconomic conditions of the country. The company dispatches clocked in at 971,576 metric tons in 2026, up 31.036 percent year-on-year. FLYNG recorded 82.50 percent capacity utilization of its existing clinker plant which translated into production of 565,950 metric tons. Besides, it also produced 340,538 metric tons of clinker in its new plant trial run.

Capacity utilization of the existing cement plant was recorded at 83 percent in 2026 which translated into 597,600 metric tons of cement. Moreover, it also produced 374,777 metric tons of cement in its new plant trial run.

Cost of sales mounted by 32.95 percent in 2026 mainly due to higher commodity prices (coal and fuel to be specific) in the latter half of the year due to Middle East crisis. Gross profit grew by 10.92 percent in 2026, however, GP margin dropped to 12.93 percent.

Operating expense slid by 25.79 percent in 2026 due to high-base effect as the company incurred hefty fine and penalties in the previous year.

No advertising & sales promotion expense also played its role in squeezing the operating expense in 2026. Number of employees was increased to 571 employees in 2026. Greater profit related provisioning and loss incurred on the disposal of capital work-in-progress items resulted in 1.86 percent uptick in other expense in 2026.

Other expense was conveniently offset by 201.76 percent stronger other income recognized during the year which was the result of greater sale of scrap, trees and damaged stock, liabilities and mark-up written back and insurance claim as the company fully settled its diminishing Musharaka facility. Operating profit grew by 42.13 percent in 2026 with OP margin improving to 12.88 percent.

Finance cost escalated by 450.72 percent in 2026 as borrowing cost which were previously added to the cost of assets or construction projects are now being recognized as an expense. Net profit dwindled by 25 percent to clock in at Rs.486.422 million in 2026. This translated into EPS of Rs.0.70 and NP margin of 3.35 percent in 2026.

Recent Performance (1QFY27)

During the first quarter of the ongoing fiscal year, FLYNG registered 39 percent stronger net sales to the tune of Rs.4856.721 million. This came on the back of robust dispatches on account of greater public sector spending and growing housing initiatives. The company also increased its production capacity to take the optimum benefit of the rising demand.

Cost of sales surged by 39.36 percent due to higher coal and fuel prices on account of Middle East crisis. However, with improved sales volume, higher retention prices, increased capacity utilization, using an appropriate mix of local and imported raw materials and captive power generation, FLYNG was able to record 37.19 percent stronger gross profit in 1QFY27 with GP margin staying almost intact at 16 percent.

Operating expense spiked by 32 percent during 1QFY27 due to inflationary pressure, greater sales volume and the enhancement of the company’s operational capacity. Greater sale of scrap, trees and damaged stock apparently translated into other income of Rs.72.76 million in 1QFY27.

Operating profit strengthened by 52.23 percent in 1QFY27 with OP margin clocking in at 15.77 percent versus 14.40 percent in 1QFY26. Finance cost slid by 1.25 percent in 1QFY27 due to lower debt level. Net profit grew by 176.15 percent to clock in at Rs.360.80 million in 1QFY27. This translated into EPS of Rs.0.52 and NP margin of 7.43 percent in 1QFY27 versus EPS of Rs.0.19 and NP margin of 3.74 percent registered in 1QFY26.

Future Outlook

FLYNG shows growth potential following the commissioning of its Line-II. Local demand is also expected to strengthen in 2027 on the back of housing incentives, lower finance cost and increased infrastructure spending.

However, elevated coal and energy prices are expected to keep the margins under pressure.