Corporate results: DG Khan Cement’s profit up 15% in FY16

Earnings amount to Rs8.79b, company announces plan to increase production capacity


Our Correspondent August 31, 2016
The company’s revenues posted a strong increase of 13.8% year on year during fiscal year 2016 on the back of strong increase in local dispatches and consistently lower input costs. Most of the increase was led by local dispatches as exports continued to decline. PHOTO: FILE

KARACHI: Dera Ghazi Khan Cement Limited (DGKC) has posted a net profit of Rs8.79 billion for the year ended June 30, up 15% compared to Rs7.62 billion in the same period last year, according to a company notice sent to Pakistan Stock Exchange (PSX).

Earnings per share (EPS) increased to Rs20.06 from an EPS of Rs17.40 in the period under review.

The company posted a net profit of Rs2.4 billion for the quarter (an EPS of Rs5.50, up by 7.1% year on year) against expectations of Rs2.38 billion (an EPS of Rs5.44 for the quarter).

The company also announced a final cash dividend of Rs6 per share.

Its share price closed at Rs197.50, down 0.95% with the benchmark-100 index losing 182 points, or 0.46%, to finish at 39,809 points.

Along with the result, the company also announced plans to increase its production capacity by up to 2.2 million tons per annum at the Dera Ghazi Khan plant site.



“Our discussion with the management suggests that expected cost of this project will be $150 million ($68 per tonne) and the company will most likely use a 50:50 debt to equity ratio to finance this project,” a JS Research report said on Wednesday.

However, these estimates may be subject to changes after final negotiations with suppliers, it added.

The company’s revenues posted a strong increase of 13.8% year on year during fiscal year 2016 on the back of strong increase in local dispatches and consistently lower input costs. Most of the increase was led by local dispatches as exports continued to decline.

“The company’s Greenfield expansion in the South region is also on track where we expect it to come online in fiscal year 2019,” the report added.

“Furthermore, it is worth highlighting that the aggressive expansions are a testament of strong demand outlook of cement going forward.”

Published in The Express Tribune, September 1st, 2016.

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