DG Khan Cement profit declines 30% in third quarter FY22

KARACHI: The unconsolidated earnings of D G Khan Cement Company Ltd (DGKC) recorded a decline of 30 per cent to Rs1.4 billion translating into the earnings per share (EPS) of Rs3.3 during the third quarter of fiscal year 2022.

The company recorded a profit of Rs2 billion (EPS: Rs4.7) during the third quarter of the last fiscal year.

During the period under review, the topline of the company increased 46 per cent on a year-on-year basis owing to higher net retention prices, likely up 42 per cent and better volumes, up 3 per cent on a year-on-year basis.

“The gross margin of DGKC declined to 19 per cent during the period from 23 per cent during the third quarter of fiscal year 2021. We believe the improvement in both domestic and export prices only partially offset the impact of higher coal prices,” Ahmed Rauf at Sherman Securities said.

The operating cost witnessed a decline of 8 per cent on a year-on-year basis during the quarter on the back of lower other expenses, down 78 per cent. On the flip side, the finance cost showed a growth of 32 per cent due to higher interest rates during the quarter.

Other income was down 60 per cent to Rs667 million during the period under review due to higher dividend income from MCB last year (cumulative dividend income of three quarters).

On a sequential basis, the earnings increased around 14 per cent during the quarter mostly due to improvement in gross margin (up 2ppts) and lower distribution cost, down 27 per cent.

Cumulatively, the DGKC posted EPS of Rs8.3 during the first nine months of fiscal year 2022, against Rs6.5 during the same period last year, due to higher revenue which were up 32 per cent, which offset the impact of higher operating and finance cost, up 17 per cent and 10 per cent respectively.