DG Khan Cement’s annual profit jumps 14pc to Rs8.94bln

Karachi: Profit of DG Khan Cement (DGKC) increased 14 percent to Rs8.938 billion for the financial year ended June 30, translating into earnings per share (EPS) of Rs20.25, a bourse filing said on Wednesday.

DGKC’s profit amounted to Rs7.853 billion with EPS of Rs18.01, a statement to the Pakistan Stock Exchange (PSX) said.

The cement maker announced final cash dividend of Rs4.25.

The company recorded sales revenue of Rs33.465 billion in FY2018 compared to Rs32.475 billion in the preceding financial year. DGKC’s board also recommended renewal of working capital loan of one billion rupees extended to Nishat Hotels and Properties Limited, an associated company, at the mark-up rate of one month Karachi Interbank Offered Rate plus 0.50 percent for a period of one year starting from the date of approval by the shareholders.

The board also proposed equity investment up to Rs721.620 million by way of purchasing of 7.596 million shares of Adamjee Insurance Company Limited, an associated company, from open market, from time to time, within a period of three years.

Analyst Nabeel Khursheed at Topline Securities said DGKC said better than expected consolidated earnings for the fourth quarter mainly due to huge tax credit on account of investment in new cement line (Hub) and adjustment of deferred taxes to the tune of Rs7-8/share.

“Another anomaly observed in 4QFY18 result was 754 percent year-on-year higher other operating expenses and 245 percent increase in other income,” Khursheed said.

DGKC booked one-time impairment and at the same time recorded one-time income on one of its power plants, thereby netting off any material impact on the bottom-line. Consolidated revenues were down two percent year-on-year in 4QFY18, mainly due to three percent decline in sales from cement operations. Cement sales were down on the back of flat dispatches and lower net retention prices.

Gross margins were considerably down by 13 percentage points to 19 percent in 4QFY18 owing to 14 percentage points decline in cement operations margin and higher production cost of DGKC’s dairy business (Nishat Dairy). Rising input costs like higher coal prices and increase in transportation expenses put pressure on cement margins.

Kohat Cement’s profit falls 16pc in FY2018

Kohat Cement Company Limited (KOHC) recorded a 16 percent fall in its profit at Rs2.98 billion for the financial year ended June 30, translating into EPS of Rs19.29.

Kohat Cement’s profit amounted to Rs3.54 billion in the preceding financial year with EPS of Rs22.94.

The company has also declared a final cash dividend of Rs5/share along with a 30 percent bonus issue.

The cement maker’s sales increased Rs19.58 billion in FY2018 compared to Rs18.59 billion in FY2017.

Analyst Faraz Abbas at Taurus Securities said the company posted profit after tax of Rs684 million with EPS of Rs4.43, up 62 percent year-on-year in the April-June quarter. Profit before tax was down 22 percent year-on-year in 4QFY18 “mainly due to 8ppts (percentage points) decline in the gross margins which clocked in at 27 percent”.

“Tax reversals to the tune of Rs160 million in 4QFY18 which we believe are attributable to the reversals on deferred tax liability saved the day for KOHC.”

Mughal’s full-year profit surges 30pc

Earnings of Mughal Iron & Steels Industries (Mughal) jumped 30 percent to Rs1.29 billion for the financial year ended June 30, translating into EPS of Rs5.13.

Mughal earned Rs991 million with EPS Rs4.21 for the preceding financial year. The company also declared cash dividend of Rs2.20/share. Analyst Moazzam Akhtar at Taurus Securities said sales revenue rose 18 percent to Rs22.23 billion in FY2018 “due to a surge in average selling prices of 14 percent and increase in sales volume of 8,000 tons”.

“Resultantly, gross margin appreciated 2.25 percentage points,” Akhtar said.

Akhtar said margins declined in the last quarter as production remained flat owing to Ramazan and Eid and slowdown in ‘G-60’ demand as a result of election season.

Mughal, in another statement to PSX, said the completion time for ongoing expansion with respect to its rolling and melting capacities was rescheduled to 4QFY2019 from 2QFY2019.