DG Khan Cement on Friday announced a net profit of Rs2.29 billion in the third quarter of fiscal year 2015-16 (3QFY16), up 16% compared to Rs1.98 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share jumped to Rs5.25 from Rs4.52 last year.
This took the cumulative nine-month (Jul-Mar) earnings to Rs6.38 billion, up 18.7% compared to net profit of Rs5.38 billion in the same period of previous year.
“The result was in line with our estimate of Rs5.34 per share for the quarter,” commented JS Research in a report.
The KSE 100-share Index rose 167 points or 0.5% to close at 33,739 points on Friday. Despite posting the profit in line with expectation, DG Khan’s share price dropped 0.9% and ended the day at Rs171.6.
The company’s revenues showed a handsome increase of 22% year-on-year in 3QFY16 due to rise in cement sales and consistently lower input costs (coal and electricity).
The increase in sales was primarily driven by domestic demand as exports continued to weaken in the current financial year to date. This resulted in higher profitability for the company.
According to the report, the key risks to valuation of the company included a breakdown in the cement pricing arrangement and delays in its expansion plans.
Published in The Express Tribune, April 23rd, 2016.
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