DG Khan Cement’s profit rises 13.8%

Company earns Rs8.9b, declares final cash dividend of Rs4.25


Our Correspondent September 20, 2018
An unanticipated increase in gas and coal prices and lower-than-expected domestic cement demand would keep the industry’s profits under pressure. PHOTO: FILE

KARACHI: DG Khan Cement reported a 13.81% higher profit that stood at Rs8.94 billion for fiscal year 2017-18, according to a notice sent to the Pakistan Stock Exchange on Wednesday. The rise can be largely attributed to tax refund.

The cement manufacturer had posted earnings of Rs7.97 billion in the last fiscal year.

According to Sherman Securities’ analyst Saqib Hussain, the higher profit is a one-off boost, otherwise the company has performed on a par with the industry, which has reported declining profits. “The higher profit is due to the high tax credit … on account of investment in a new cement production line,” he said.

The company reported earnings per share (EPS) of Rs20.25, higher by 12.43% compared to previous year’s EPS of Rs18.01. It also announced final cash dividend of Rs4.25 per share.

Gross profit dipped 26% from Rs11.84 billion last year to Rs8.74 billion in FY18. Despite the dip in gross profit, revenues increased slightly by 1.7% to Rs30.66 billion.

According to Topline Securities’ analyst Nabeel Khursheed, the industry expects a decline in cement prices. “The declining price movement adversely affects the profitability,” he added.

Meanwhile, an unanticipated increase in gas and coal prices and lower-than-expected domestic cement demand would keep the industry’s profits under pressure.

DG Khan Cement’s stock price rose by 1.63% from Rs105.35 to Rs107.07 during trading at the Pakistan Stock Exchange.

Published in The Express Tribune, September 20th, 2018.

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