Bestway Cement Profit Climbs Despite Weakening Core Business and Shrinking Margins

ISLAMABAD: Bestway Cement Limited reported higher after-tax profit for FY2026, though the increase stems largely from sources outside its core cement operations. The company's board approved the year's financial results at a meeting held in Islamabad on Wednesday, with after-tax profit reaching Rs 25.76 billion against Rs 23.86 billion the previous year. The metrics that measure actual cement sales performance, however, point to a weaker underlying trend.

Bestway Cement FY2026 Results

Gross profit fell to Rs 32.46 billion from Rs 37.28 billion a year earlier, while operating profit declined to Rs 26.52 billion from Rs 31.84 billion. Cost of sales rose to Rs 75.82 billion from Rs 70.48 billion, compressing margins despite net turnover posting a modest increase to Rs 108.28 billion from Rs 107.76 billion.

The company's equity investments, rather than its cement business, drove this year's earnings growth. Bestway's share of profit from equity-accounted investees rose to Rs 14.55 billion from Rs 10.75 billion, a gain that kept profit before tax nearly unchanged at Rs 36.38 billion, compared with Rs 36.45 billion last year. Earnings per share climbed to Rs 43.20 from Rs 40.02 on an unconsolidated basis, an increase attributable primarily to this outside investment income rather than to operational performance.

Board Maintains 400% Cash Dividend

The board's dividend decision reflects continuity despite the softer operating results. Directors recommended a final cash dividend of Rs 10 per share, equivalent to 100% of face value, in addition to the Rs 30 per share interim dividend already disbursed during the year. Total distributions for FY2026 now stand at Rs 40 per share, or 400% of face value. The company did not announce bonus shares or right shares alongside the cash dividend.

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Shareholders whose names appear on the register as of August 24, 2026 will be entitled to the final dividend. Bestway Cement will close its share transfer books from August 25 to August 31, 2026, ahead of its Annual General Meeting, scheduled for August 31.

Automotive Expansion Heads to Shareholders

A separate disclosure within the same filing carries implications that may prove more consequential for shareholders over the medium term. Bestway Automotive (Private) Limited, a wholly owned subsidiary engaged in vehicle manufacturing, has sought a substantial increase in its paid-up capital. The subsidiary has asked its parent company to subscribe to 599,990,000 right shares, a figure that significantly exceeds the scale typically associated with routine capital adjustments and suggests the automotive business requires considerable additional funding to support its planned expansion.

The board of Bestway Cement has not yet committed to the subscription. Directors reviewed the proposal and resolved to refer the matter to shareholders at the forthcoming Annual General Meeting, where the automotive subsidiary's stated capital requirements will be weighed against alternative uses of the same funds.

The outcome of that vote on August 31 will determine the extent of Bestway Cement's financial commitment to its automotive venture, a decision that carries added weight given that the parent company's core cement business is already contending with a heavier cost burden than it faced a year earlier.