DG Khan Cement’s profit skyrockets 81.5% to Rs1.3b

Rise comes on back of robust revenues due to new production line

KARACHI: DG Khan Cement Company’s profit soared 81.5% to Rs1.3 billion for the quarter ended December 2018.

The cement manufacturer had reported a profit of Rs732.8 million in the same quarter of previous year.

It posted earnings per share (EPS) of Rs3.04 in the second quarter of FY19 compared to Rs1.67 in the same period of FY18.

In May 2018, the cement company kick-started production at its new 2.6-million-ton plant in Hub, Balochistan. Its southern plant is entitled to a five-year tax holiday. On that basis, the company received tax benefits, which were reflected in its bottom-line, said Topline Securities’ analyst Nabeel Khursheed.



Cement revenues were robust mainly due to inflated volumes from the new production line.

However, finance cost of the company surged almost seven times on a year-on-year basis due to high debt taken to run the new cement line coupled with a 450-basis-point rise in interest rate since January 2018.

DG Khan Cement’s half-yearly profit plunged 52% to Rs1.67 billion against Rs3.47 billion in the same period of previous year.

The company posted EPS of Rs3.82 for July-December 2018 against Rs7.91 in the corresponding period of previous year.

The board of directors resolved to make further equity investment of up to Rs200 million in Nishat Hotels and Properties Limited, an associated company.

Published in The Express Tribune, February 27^th, 2019.

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