Ghani Chemical Industries Limited recorded earnings per share of PKR 3.98 in FY25, as compared to PKR 1.60 in FY24. The company recorded net sales of PKR 7.4 Bn, up 37% from PKR 5.4 Bn in FY24. During FY25, the company’s gross margin rose from 30% in FY24 to 46%.
Along with this, it saw its gross profit increase from PKR 1.6 Bn in FY24 to PKR 3.4 Bn in FY25. GCIL posted profit after tax of PKR 2.0 Bn in FY25, compared to PKR 786 Mn in FY24. The company commissioned its 275 TPD ASU plant in the Hattar Special Economic Zone in April this year.
This plant is expected to be 30% more efficient than pervious plants. The company is also in the process of designing its plant for Oman and is expecting that the plant will be exported once the plans are finalized. It highlighted that while the cost of electricity is lower in Oman, the selling price of oxygen is also lower thereby offsetting any chance of supernormal profits due to price arbitrage.
It was highlighted that currently the ship breaking industry is operating at a very low capacity and therefore does not contribute more than 1% to GCIL’s revenues. As such, the management hopes that any revival in the ship breaking sector could deliver material revenue growth prospects.
The company is in advanced stages of setting up a 450 Ton LPG storage & filling facility near Phool Nagar and has already acquired the necessary license from OGRA. Approval from the Explosive Department is remaining after which the construction of the facility will begin. The company has recently signed a JV agreement with MARI for the capturing and processing of cold-vent/exhaust gases from Sachal Gas Processing Complex. It expects this to have a capacity of 80,000 Tons per annum of LNG and 55,000 Tons per annum of industrial and food grade carbon dioxide. GCIL will hold a 49% stake in this project. The management expects that the total capital expenditure for this project will be PKR 14 Bn with financing to be done through suppliers.
The terms of financing are 25% upfront with the remaining 75% to be paid in 8 quarterly instalments to the suppliers 3 months after successful commissioning of the facility. The total revenue potential of this project is PKR 17 Bn per annum with an anticipated net margin of 10%.
The first phase of this project is expected to come online by October 2026. Management highlighted that currently industries receive gas at a rate of PKR 4,000 per MMBTU for power and about PKR 3,000 per MMBTU for process gas. GCIL expects to sell its own LNG from this project at the lower end of this range with a specific focus on those areas where existing players do not provide supply.
Moving forward, the management was of the view that margins are sustainable for the remainder of FY26 however, there may be slight compression starting FY27 as the current levels are historically high. The company is also in the process of evaluating energy costs and hopes to add solar capacity to offset the high cost of the grid.
Important Disclosures
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