Corporate results: DG Khan Cement’s profit rises 8%

EPS recorded at Rs13.62 for fiscal year 2013-14.

KARACHI:

DG Khan Cement – one of the top cement makers in Pakistan – has announced a net profit of Rs5.96 billion for the year ending on June 30, 2014, up 8% compared to Rs5.5 billion in the same period of the previous year.

Earnings per share (EPS) were recorded at Rs13.62 during fiscal year 2014 compared to an EPS of Rs12.56 registered during FY13.

The company also announced a final cash dividend of Rs3.50 per share along with the result.



The increase in earnings was primarily supported by lower distribution costs and financial charges, said the Global Research.

On a quarterly basis, earnings of the company surged 59% quarter on quarter to Rs2 billion or an EPS of Rs4.61 during the fourth quarter (April to June) of fiscal year 2014 because of a significant improvement in gross margins and a reduction in financial charges.

The revenues of the company increased 7% year on year to Rs26.54 billion in spite of a decline in off-take to 3.96 million tons during fiscal year 2014 as local cement prices increased by 12% year on year to Rs506 for a 50-kg bag.

On a quarter on quarter basis, revenues declined 4% to Rs6.93 million during the fourth quarter of fiscal year 2014 because of a 6% quarter on quarter decline in cement dispatches to 1.01 million tons.

Despite higher cement prices, margins of the company declined 2 percentage points (pps) to 35% year on year during fiscal year 2014 because of an increase in electricity and gas tariffs that were hiked by 60% and 17%, respectively.

On a quarterly basis, gross margins of the company recovered by 5 percentage points (pps) year on year to 42% during fourth quarter of 2014, with the increase likely resulting from higher cement prices and the installation of an 8.4MW waste heat recovery (WHR) plant at its Khairpur site.

Other income of the company increased by 12% year on year to Rs1.64 billion during fiscal year 2014 because of higher dividends received from the company’s investment in Muslim Commercial Bank (MCB).

Financial charges of the company declined by 39% year on year to Rs609 million during fiscal year 2014 because of a 37% reduction in the company’s debt to Rs6.1 billion as of March 30, 2014.

The company has also announced its intentions to invest an additional Rs2 billion in Nishat Dairy, Rs1 billion in Nishat Hotels and Rs18.1 million in Nishat Paper Products.

Published in The Express Tribune, September 17^th, 2014.

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