Domestic demand, higher prices boost DG Khan 1H profit

Pakistan-based cement producer DG Khan Cement reported a rise in second-quarter profit-after-tax up of 53 per cent to PKR1.5bn (US$15.3m), thanks to advances in domestic demand on the back of the government's Public Sector Development Programme and higher prices. This takes half-year profit for FY12-13 to PKR2.9bn, representing a growth of 128 per cent.

According to a report of BMA Capital, DGKC's local dispatches rose by six per cent on YoY basis in the first half of the financial year 2013 to 1.37Mt, driven by healthy demand growth, amid an acceleration of PSDP releases.

Coupled with an average eight per cent hike in cement prices to PKR440/ per bag, this took net sales for DGKC up by 11 per cent on YoY basis to PKR11.8bn during the first half of the current fiscal year. The healthy top-line growth was further magnified in profitability because of a 35 per cent drop in the finance costs to PKR577m as the company entered a debt retirement phase.

Earlier this week, CemNet news reported that the company has registered with the United Nations Framework, Convention on Climate Change (UNFCCC) for the qualification of Carbon Emission Reductions (CERs). The expected CERs from projects will be approximately 350,000 per annum and includes various projects at its two cement plants, Khofli Sattai plant, Dera Ghazi Khan and Khairpur plant, Chakwal.