Corporate results: DG Khan Cement records Rs7.63b in earnings

Decline in borrowing cost helps increase profit for the year


Decline in borrowing cost helps increase profit for the year. PHOTO: FILE

KARACHI: Dera Ghazi Khan Cement - one of the largest cement makers of the country and part of the Nishat Group - has posted net earnings of Rs7.63 billion in the year ending on June 30, up 28% compared to full-year earnings of Rs5.97 billion in the same period of last year.

Earnings per share (EPS) increased to Rs17.40 against an EPS of Rs13.62 in the period under review.

The company has also announced a final dividend of Rs5.00 per share. The company posted a profit of Rs2.25 billion in the fourth quarter (April to June 2015), exhibiting a growth of 11% against a net profit of Rs2.02 billion in the same period of last year. Earnings per share (EPS) in the fourth quarter jumped to Rs5.14 from an EPS of Rs4.61.

The key reasons behind the earnings performance were; improvement of 80 basis points (bps) year on year (YoY) in gross margins to settle at 42.4% during fourth quarter of fiscal year 2015 (4QFY15) fuelled by falling coal prices.

DESIGN: NABEEL AHMED

Secondly, 18% YoY decline in borrowing costs due to lower interest rates and deleveraging of balance sheet, and reduced administration and selling expenses (down 17% year on year) also provided support.

The share price of the company has already gained 24.4% in calendar year to-date (CYTD).

The production capacity of the company is 14,000 tons per day (4.200 million tons per annum). It has three cement plants; two are located in Dera Ghazi Khan and one in Khairpur District, Chakwal.

Published in The Express Tribune, September 22nd, 2015.

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