Investor Presentaiton

Cement Financial Risk - Borrowings . PACRA According to the SBP Report, total borrowing book of the cement sector clocked in at PKR~185bln as at End-Feb’21, i.e., ~50% of the Sector's revenue in FY20. The capacity expansion cycles are majorly financed through external debt, which results in the sector's borrowing book to increase. Almost ~60% of the Sector's borrowings are, therefore, long term in nature. The Sector is moderately leveraged (~47%). A leverage ratio ranging between 45%-50%, despite hefty CAPEX and debt financing, reflects good capital formation. With new capacity enhancement on cards, the Sector's leverage ratio may slide up in the coming periods, owing to additional long term debt financing needs. Gearing Ratio 60% 51% 50% 47% 40% 44% 30% 35% 20% 19% 20% 10% 0% FY16 FY17 FY18 FY19 FY20 1HFY21 Borrowing Mix as at end 1HFY21 3% 9% 3% 26% 58% ■ Export Financing ■Import Financing ■Short Term Borrowing ■Long Term Borrowing ■ Other Source: APCMA, PBS, Companies Financial, PACRA Internal Database, SBP 15

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