Dewan Cement posts profit of Rs268m, up 61%

Earnings per share amount to Rs0.55, in line with expectations

KARACHI: Dewan Cement Limited (DCL) posted a net profit of Rs268 million in the three-month period ended September 30, up 61.4% compared to Rs166 million in the same period last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

Earnings per share (EPS) increased from Rs0.35 to Rs0.55 in the period under review. The company’s share price closed at Rs31.56, up 2.3% from Rs30.86, on Monday.

“The announcement remained in line with expectations of Rs0.54 for the quarter,” JS Research said.

Revenue of the company increased by 14% year-on-year to Rs2.942 billion (-18% quarter-on-quarter) mainly on the back of increasing dispatches and increased prices post imposition of increased federal excise duty (FED) on cement manufacturers.

Gross margins stayed unchanged at 19% compared to the same period last year. “Subpar gross margins are mainly due to less than desirable energy efficiencies of the company’s plant,” the report added.

Last month, the company informed shareholders that it has received a request from a Chinese strategic investor seeking permission for due diligence of Dewan Cement, which may eventually lead to acquisition of shares in the company.

Dewan Cement has a production capacity of around 2.88 million tons per annum, constituting 6.1% of the total installed capacity of 45.6 million tons of the cement industry. It has two manufacturing units including Pakland Cement and Saadi Cement.

Published in The Express Tribune, November 1^st, 2016.

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