DG Khan Cement’s profit drops 6% to Rs7.85b

Earnings per share stand at Rs18.01 in FY17, result in line with expectations

KARACHI: DG Khan Cement Company Limited posted a consolidated net income of Rs7.85 billion in fiscal year ended June 30, 2017, down 6% compared to Rs8.38 billion in the previous year, according to a company notice sent to Pakistan Stock Exchange (PSX).

The result was in-line with expectations, according to a Topline Securities report.



Earnings per share (EPS) stood at Rs18.01 compared to an EPS of Rs19.52 in the period under review. The KSE-100 index closed at 43,253, up 411 points or 0.96%. DG Khan Cement’s share price closed at Rs152.86, up 0.47%.

The company’s consolidated revenue declined by 10% year-on-year during the outgoing quarter, mainly on account of 11% decline in revenue from cement operations.

Sales from cement operations clocked in at Rs7.5 billion, down 11% in fourth quarter of fiscal year 2017. Lower sales were attributable to about 14% decline in cement dispatches where local sales were down by around 9%.

During the fourth quarter of fiscal year 2017, the company’s consolidated gross margins shrunk by seven percentage points to 32% while gross margins of cement operations fell by 10 percentage points to 35%.

Pre-tax earnings from cement operations declined by 31% year-on-year, however, higher effective tax rate, up five percentage points to 37.6% led to 37% fall in earnings in fourth quarter of fiscal year 2017. In fiscal year 2017, sales from cement operations remained almost flat while earnings declined by 9%, primarily owing to three percentage points decline in gross margins.



Delay in commissioning of new cement line, price competition, unanticipated increase in gas and coal prices and lower than expected local cement demand are key risks to the company, the report added.

Published in The Express Tribune, September 20^th, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.