DG Khan Cement posts a profit after tax of PKR804m in 1QFY24-25

DG Khan Cement announced its financial results on the Pakistan Stock Exchange (PSX) website on 17 October, reporting a profit after tax of PKR804m (US$2.89m) in the 1QFY24-25. This marks a 21.6 per cent increase from a profit of PKR661m in the equivalent period of the previous financial year, which followed a loss after tax of PKR1.692bn in the 1QFY22-23. A preliminary analysis indicates that a reduction in the cost of sales and lower financing costs contributed to the company’s notable profit.

BMA Capital Management Ltd noted that the company’s earnings surpassed market expectations, driven by higher-than-anticipated gross margins. However, DG Khan Cement’s revenue declined by seven per cent YoY, totalling PKR15.3bn during the period, likely due to decreased volumetric sales.

In the reported period, DGKC’s local dispatches totalled 0.75Mt, reflecting a 22 per cent YoY decline and an 11 per cent decrease QoQ. In contrast, exports rose by 98 per cent QoQ but fell by three per cent compared to the previous quarter, reaching 0.44Mt.

Analysts attribute the higher gross margins to increased retention and declining coal prices. The company reported distribution costs of PKR818m for the period, representing a 61 per cent increase YoY but an 18 per cent decline QoQ.

In addition, DGKC reported a 26 per cent rise in other income, reaching PKR1.038bn, likely driven by dividends received from MCB Bank and higher returns from cash and short-term investments. Finance costs amounted to PKR1.589bn, down 24 per cent YoY and 18 per cent QoQ.

by Abdul Siddiqui, Pakistan