Tokyo Cement posts strong FY 2025/26 4Q performance amidst intense cost pressures

Tokyo Cement Group (Tokyo Cement) reported a turnover of Rs.17,623 million for the fourth quarter ending March 31, 2026, compared to Rs.12,960 million recorded in the corresponding quarter of the previous year, reflecting a 36 percent growth in turnover.
The group reported a profit after tax (PAT) of Rs.577 million for the quarter, compared to Rs.664 million recorded in the same period last year. 
Profitability during the quarter was impacted by the depreciating currency and rising material costs, as a result of the geopolitical disruptions affecting the global trade flows.
For the financial year ending March 31, 2026, the group reported a turnover of Rs.61,011 million, compared to Rs.50,096 million recorded in the previous year, representing a 22 percent growth in turnover. 
During the financial year, the group recorded a 28 percent growth in cement sales volumes, significantly outperforming the overall industry growth of 19 percent, further strengthening its position as the market leader.
The group reported a PAT of Rs.2,580 million for the year, compared to Rs.3,459 million recorded in the previous financial year. 
Profitability was impacted by the group absorbing a substantial portion of the cost escalations, in order to minimise the price volatility for the end consumers and safeguard the market share in an intensely competitive environment. 
Furthermore, capitalisation of the capacity expansion projects and the acquisition of a vessel for coastal shipments increased depreciation and financial expenses. 
The resumption of the previously stalled government-funded infrastructure and private-sector construction projects drove an increase in demand for cement and concrete through the financial year. This demand momentum was further compounded upon by the cyclical increase in construction activities during the January-March period and the post-Ditwah rebuilding efforts. Consequently, national cement consumption recorded a year-on-year increase of 19 percent to 5.62 million metric tonnes during the financial year.
Whilst the encouraging financing environment and stable material prices continued to support sector growth, persistent challenges in sourcing skilled and unskilled labour remained one of the most critical constraints faced by the industry. 
The macroeconomic conditions over the course of the financial year remained relatively resilient, supported by a strong fiscal performance, rising remittance and foreign exchange inflows, subdued inflation and robust private sector-led growth. However, the escalating geopolitical tensions disrupted the raw material imports and increased costs in the last quarter, leading to price increases across sectors. 
The rupee, which appreciated against the US dollar by 1.6 percent and 1.9 percent in 1Q and 2Q, respectively, started to depreciate by 1.1 percent in 3Q and 6.0 percent in 4Q of FY2025/26. The risk of eroding the fiscal buffers continued on to the 1Q of FY2026/27, where the rupee depreciated a further 1.7 percent against the US dollar. 
During the quarter, the fuel prices were raised by 38 percent, driving up operations and distribution costs across the industries. Deployment of the new vessel for coastal shipping helped improve distribution efficiency from Trincomalee to the rest of the country, while also reducing exposure to fuel shortages and transport delays.
Nevertheless, the recent appointment of local contractors for the Rambukkana-Galagedara section of Phase II of the Central Expressway is expected to contribute positively to the sector growth, whilst the timely commencement of other large-scale infrastructure projects proposed under Budget 2026 is anticipated to further reinforce construction demand in the months ahead. 
In addition, the acceleration of post-cyclone reconstruction of housing, transport infrastructure, schools and other critical public assets is expected to sustain construction sector activity during the remainder of the calendar year.
Tokyo Cement maintains a cautiously optimistic medium-term outlook and remains confident in the country’s economic fundamentals. The group’s investments in capacity enhancements positions it to capture the anticipated growth in demand arising from the renewed development activity. 
Continuing its disciplined cost management approach, Tokyo Cement Group remains committed to safeguarding stakeholder value and playing an active role in supporting the nation’s economic resurgence.