Corporate results: DG Khan Cement posts strong profit, up 27%

Net income rises to Rs3.39b compared to Rs2.67b in previous year

KARACHI:

DG Khan Cement – one of the largest cement-makers in the country – has announced a net income of Rs3.39 billion for the first six months ended December 2014, up by a healthy 27% compared to Rs2.67 billion in the same period of previous year.

Earnings per share (EPS) also jumped to Rs7.75 compared to an EPS of Rs6.09 in the first half of the previous year.

On a quarterly basis, the company’s earnings surged by 93% quarter-on-quarter (QoQ) to Rs2.24 billion or an EPS of Rs5.10 during the second quarter of fiscal year 2015.

“The earnings were significantly above our estimates due to higher-than-estimated other income and lower-than-expected taxation charges,” Global Research reported on Tuesday.

With stable off-take and prices, the revenues increased by 2% year-on-year (YoY) to Rs12.66 billion during the first half of fiscal year 2015 because of an improved sales mix.

Revenues jumped by 18% QoQ to Rs6.8 billion during the second quarter because of a likely 16% QoQ increase in total off-take to one million tons.

Margins of the company declined by one percentage point YoY to 33% during the first half because of higher average energy costs and increased maintenance expenditures.

On a quarterly basis, margins recovered by three percentage points QoQ to 34% because of higher volumetric off-take and an improved sales mix.

DG Khan Cement’s other income improved by 18% YoY to Rs1.13 billion during the first half because of higher income from its investments. Meanwhile, other expenses declined by 11% YoY to Rs315 million during the first half because of a lower quantum of exchange losses.

Financial charges plummeted by 57% YoY to Rs156 million because of a 43% YoY decline in the company’s average debt to Rs5.3 billion.

On a quarterly basis, financial costs increased by 34% QoQ to Rs89 million during the second quarter because of an increase in short-term borrowings.

Published in The Express Tribune, February 18^th, 2015.

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