DG Khan Cement’s profit plunges 88% to Rs341m
Fall comes due to elevated production cost, high base effect
D G Khan Cement profits plunge. PHOTO: FILE
KARACHI:
DG Khan Cement Company’s (DGKC) profit plunged 88% and amounted to Rs341 million for the Jul-Sept 2018 quarter.
The cement company had registered a profit of Rs2.73 billion in the same quarter of previous year.
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According to Sherman Securities’ research analyst Saqib Hussain, the decline in earnings was due to high cost of production as well as a high base effect as the company had booked tax credit in the first quarter of previous financial year.
Gross profit dropped from Rs2.7 billion in the Jul-Sept quarter last year to Rs1.08 billion in Jul-Sept 2018.
“This is mainly due to low utilisation of cement plants which stood at 67% during the quarter under review against 109% in the same period last year,” Hussain told The Express Tribune.
Earnings per share of the company plunged to Rs0.78 compared to Rs6.24 last year.
Moreover, a substantial depreciation expense of the new south plant coupled with financing cost negatively impacted earnings of the company. “Resultantly, gross margins came in at 13% compared with last year’s 35% in the same period,” he added.
The profit of the company was below market expectation. “We believe the deviation came due to lower-than-expected export retention prices,” said Farheen Irfan of Elixir Securities.
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“This has also been confirmed by our discussion with the management, which hinted that the company exported clinker from its south plant at a price of around $36 per ton compared to our estimate of $40 per ton.”
Published in The Express Tribune, October 26th, 2018.
DG Khan Cement Company’s (DGKC) profit plunged 88% and amounted to Rs341 million for the Jul-Sept 2018 quarter.
The cement company had registered a profit of Rs2.73 billion in the same quarter of previous year.
Sector F-10 green area: Petition filed against cement mixing plant
According to Sherman Securities’ research analyst Saqib Hussain, the decline in earnings was due to high cost of production as well as a high base effect as the company had booked tax credit in the first quarter of previous financial year.
Gross profit dropped from Rs2.7 billion in the Jul-Sept quarter last year to Rs1.08 billion in Jul-Sept 2018.
“This is mainly due to low utilisation of cement plants which stood at 67% during the quarter under review against 109% in the same period last year,” Hussain told The Express Tribune.
Earnings per share of the company plunged to Rs0.78 compared to Rs6.24 last year.
Moreover, a substantial depreciation expense of the new south plant coupled with financing cost negatively impacted earnings of the company. “Resultantly, gross margins came in at 13% compared with last year’s 35% in the same period,” he added.
The profit of the company was below market expectation. “We believe the deviation came due to lower-than-expected export retention prices,” said Farheen Irfan of Elixir Securities.
corporate result: Fauji Cement posts 80% profit hike
“This has also been confirmed by our discussion with the management, which hinted that the company exported clinker from its south plant at a price of around $36 per ton compared to our estimate of $40 per ton.”
Published in The Express Tribune, October 26th, 2018.