The cement producer has paid down a KIBOR-linked syndicated loan ahead of schedule, reducing its exposure to floating interest rates. Its stock exchange filing leaves the resulting savings undisclosed.
KARACHI, Nov. 10 (Focus Pakistan) — Fauji Cement has cleared Rs3.37 billion off a bank loan before it fell due, the company disclosed Tuesday. Rising profits are giving the cement maker room to shrink its interest bill.
The exact figure is Rs3,367 million. It goes back to a group of banks that lent the Rawalpindi company long-term money at a rate pegged to KIBOR, short for Karachi Interbank Offered Rate. KIBOR rises and falls, and so does what Fauji pays. A smaller loan balance means smaller payments to the banks, the company said.
It left out two things investors would like to know: what the company still owes on the facility, and which banks are in the group.
The size of the payment stands out. Fauji Cement earned Rs4.96 billion after tax in the July-September quarter, according to results it posted on Oct. 27. Tuesday’s repayment equals about 68% of that figure.
It also dwarfs what the company now spends on borrowing. Its quarterly net finance cost came to just Rs405 million, against Rs668 million in the same three months of 2025. In a single payment, Fauji Cement handed its lenders more than eight times that quarterly interest bill.
Profit jumped 51% in the quarter. Net sales rose 11% to Rs26.05 billion, and gross margin widened to 36% from 32%. Earnings per share climbed to Rs2.02 from Rs1.34. The board declared no dividend.
A PATTERN, NOT A ONE-OFF
Tuesday’s move continues a strategy Fauji Cement has followed for more than a year. In the year to June 2026, its net finance cost dropped 49%. Business Recorder’s research desk linked that fall to “early loan payments” that cut the company’s outstanding debt.
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Full-year profit for that period rose 21% to Rs16.18 billion on sales of Rs93.69 billion, BR Research reported.
For a borrower on a floating rate, every rupee it pays back early stops earning the banks interest. KIBOR moves with the State Bank of Pakistan’s policy rate, so Fauji Cement locks in savings now instead of betting on cheaper money later.
The company has also expanded. Fauji Cement bought 84.06% of Attock Cement Pakistan Ltd jointly with Kot Addu Power Company.
The repayment comes as cement makers in the north face a harder export market. Industry-wide despatches reached 4.81 million tons in October, almost flat from a year earlier, according to All Pakistan Cement Manufacturers Association data reported by Mettis Global.
Northern mills shipped no cement abroad in October. All 768,754 tons of the country’s exports came from southern plants. Fauji Cement’s plants are all in the north: at Jhang Bahtar in Attock, Wah, Nizampur in Nowshera and Dera Ghazi Khan.
Local demand held up better. Domestic despatches rose 1.17% in October and 5.93% over the first four months of the fiscal year, the data show.
WHY SHAREHOLDERS SHOULD CARE
For shareholders, the math is simple. Less debt means less interest. Less interest means the company keeps more of its operating profit, cash that could later back dividends or expansion.
Investors still want to know how much debt Fauji Cement carries after this payment, and whether more early repayments will follow. The company has not said.
For now, one of Pakistan’s biggest cement makers has chosen to pay its bankers early rather than wait, a sign that its cash flow can carry the bill.
