Business

DG Khan Cement Half-Year Profit Slumps by Over 55%

D.G. Khan Cement Company Limited (DGKC) saw its half-year (1HFY23) profit after tax (PAT) drop by 57% to Rs. 932 million, compared to Rs. 2.17 billion in the same period the previous fiscal year.

On Wednesday, the cement manufacturer announced its financial results for the half year ended December 31, 2022. In 1HFY23, the company reported earnings per share (EPS) of Rs. 2.13, compared to 4.97 in 1HFY22.

The company reported PAT of Rs. 543 million in 2QFY23, a 57 percent decrease from the previous fiscal year’s PAT of Rs. 1.27 billion.

Sales were Rs. 16.2 billion in 2QFY23, down 1% from the same period the previous year due to a massive 40% drop in dispatches, which offset the impact of a nearly 50% increase in retention prices.

According to a report by Arif Habib Ltd, revenue increased by 8% in 1HFY23 compared to the previous year, as robust growth in cement prices offset the impact of a 34% drop in cement offtake.

Gross margins remained well below expectations in 2QFY23, at 13.5 percent, compared to 16.9 percent in the same period last fiscal year, due to volumetric decline, increase in coal prices, high power tariff, and rupee depreciation, all of which offset the impact of an increase in retention prices.

In 1HFY23, margins were 14.3 percent, compared to 17.7 percent in the same period the previous fiscal year.

Other income remained flat year on year (YoY) in the second quarter of fiscal year 23 at Rs. 731 million. Other income increased by 8% in the first half of fiscal year 23 to Rs. 1.39 billion.

Finance cost increased by 101 percent to Rs. 1.6 billion in 2QFY23, while it increased by 108 percent in 1HFY23 due to higher interest rates.

In 2QFY23, the company reported effective taxation of 33%, up from 25% in the same period the previous year.

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