Fauji Cement Company Limited has repaid Rs3,367 million of a long-term bank loan ahead of schedule, the company told the Pakistan Stock Exchange on Monday 10 November.

The early repayment was made against a KIBOR-based long-term loan facility taken from a syndicate of banks. Fauji Cement said it expected the move to reduce its debt service costs.

Strong quarter behind the repayment

The repayment follows a strong first quarter. For the three months ended 30 September 2026, Fauji Cement reported profit after tax of Rs4.96 billion, up 51 per cent on the same quarter a year earlier, on revenue of Rs26.05 billion, up 11.2 per cent.

Earnings per share rose to Rs2.02 from Rs1.34, while gross profit increased 26.8 per cent to Rs9.36 billion. Finance costs fell 37.1 per cent to Rs714 million in the quarter, as lower borrowing and falling interest rates cut the cost of servicing debt.

The board recommended no cash dividend, bonus shares or right shares with the first-quarter results, keeping cash inside the business as it continues to pay down borrowings.

A year of cutting debt

Fauji Cement closed the 2026 financial year with profit after tax of Rs16.18 billion on turnover of Rs93.69 billion, and finance costs for the year fell 28 per cent to about Rs4.1 billion. The early repayment is the latest step in that deleveraging.

By retiring expensive long-term debt early, the company cuts the interest it must pay in future quarters and frees up cash for operations and investment. KIBOR-based loans carry floating rates linked to the Karachi interbank offered rate, so paying them down early also reduces exposure to any future rise in borrowing costs.

What it means for the company

Cement makers in Pakistan have faced high energy costs and uneven demand, making balance-sheet strength a competitive advantage. A lighter debt load leaves Fauji Cement, one of the country's biggest cement producers, better placed to fund maintenance, efficiency work and expansion from its own cash flow rather than from new borrowing. The company makes cement at plants including Nizampur in Khyber Pakhtunkhwa and Jhang Bahtar in Punjab, and lower financing costs leave more cash to maintain and upgrade those sites.

The company has not said whether further early repayments are planned. For now, the Rs3,367 million payment trims its long-term loan book and, on the company's own expectation, lowers the interest bill that has weighed on earnings in recent years. Investors will watch the next quarterly filing for the full effect on finance costs.