Abhishek Kushwaha,

Nepal's listed cement companies have reported improved financial performance for the third quarter of the current fiscal year, reflecting a notable turnaround in profitability. This improvement has been largely driven by increased revenue, reduced production costs, and declining financial expenses. As a result, even companies that had previously been operating at a loss have managed to narrow their losses.

Out of the four cement companies listed on NEPSE, two company Shivam Cements and Sarbottam Cement, have reported profits, while Ghorahi Cement and Sonapur Minerals remain in the red, albeit with significantly reduced losses compared to the previous year.

Sarbottam Cement has shown particularly impressive performance, with a substantial rise in its operating income, leading to a significant boost in profitability. Shivam Cement also saw profit growth due to reduced financial expenses.

Collectively, the cement companies posted a net profit of NPR 373.2 million in the third quarter, a stark contrast to the NPR 595.2 million loss recorded in the same period last year.

The combined paid-up capital of these companies stands at NPR 18.07 billion, while reserves and share premium amount to NPR 15.54 billion. Most of the companies have maintained sizable reserve funds.

The improvement in financial results is attributed to multiple favorable factors:

• A decline in raw material costs,
• Increased market demand for cement,
• Expansion in production capacity, and
• Growing influence of large-scale infrastructure projects initiated by the government, alongside increased construction activities in the private sector.

Additionally, the ongoing decline in interest rates has played a pivotal role. As borrowing becomes cheaper, both individual and industrial construction projects gain momentum. This trend supports higher demand for construction materials like cement and steel rods.

If the low-interest environment persists and construction activities continue to accelerate, further improvements in the financial performance of cement companies are likely in the coming quarters.

In summary, the third quarter marks a positive shift for Nepal’s cement industry, signaling resilience and potential for growth amidst evolving market dynamics.