DG Khan Cement earns Rs2.6b, beats expectations

Earnings rise 9% in the Oct-Dec quarter of FY17

KARACHI: DG Khan Cement - one of the largest cement-makers in Pakistan - has posted a consolidated profit of Rs2.66 billion for the second quarter ended December 31, 2016, up 9% compared with Rs2.44 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Thursday.

Earnings per share (EPS) improved to Rs6.08 in Oct-Dec 2016 compared with Rs5.58 in the corresponding period of previous year.

Cumulatively, in the first six months (Jul-Dec) of financial year 2016-17, the company earned a consolidated profit of Rs4.39 billion, up 14.3% from Rs3.84 billion in Jul-Dec FY16.

DG Khan Cement’s stock price closed at Rs236.25 with a fall of 0.96% compared to its closing price a day earlier. In the broader market, however, the KSE 100-share Index ended at 49,588, up 374 points or 0.76%. The earnings growth was driven by a marked rise in revenues, stable gross margins and a lower effective tax rate.

The quarterly earnings came in significantly higher than the expectation of Rs2.13 billion primarily due to higher-than-projected growth in cement dispatches, particularly domestic sales, and relatively lower effective tax rate of 22% against an estimated 30%, AKD Research commented in its report.

Gross margins improved by 34 basis points year-on-year following recent installation of a 30-megawatt waste heat recovery plant.

Published in The Express Tribune, February 17^th, 2017.

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