DG Khan Cement’s half-yearly profit slumps 43 percent

KARACHI: DG Khan Cement Company Limited on Thursday announced its profit fell 43 percent to Rs946 million for the half-year period December 31, 2019, which brings the EPS (earning per share) to Rs2.16.

The cementmaker in a statement said it had earned Rs1.671 billion (EPS: Rs3.82) in the corresponding period of the last year. No final cash dividend was announced for the period. It further said its topline during 2QFY20 witnessed a slight increase of 2 percent year-on-year to Rs11.8 billion.

Arif Habib Limited in a note said, “Total dispatches posted a growth of 25 percent year-on-year; however, weak retention prices kept the topline growth restricted”. Furthermore, gross margins in 2QFY20 eroded 5 percent to 13.2 percent, compared to 18.5 percent in 2QFY19 due to 14 percent year-on-year devaluation in the rupee-dollar parity along with lower retention prices, which offset the impact of 24 percent year-on-year decline in coal prices, the brokerage added.

The company said its finance costs escalated 63 percent year-on-year to Rs1200 million in the quarter under review, which analysts attributed to higher borrowing along with higher interest rates.

The statement said the DGKC booked a tax credit of Rs424 million in 2QFY20 vis-à-vis a tax credit of Rs254 million recognised in same period last year. Nishat Power 6-month profit rises 31 percent

Nishat Power Limited reported its profit increased 31 percent to Rs2.496 billion for the July-December period of the year fiscal year 2019-20, which settles the EPS at Rs7.051.

The power producer in a communication to the Pakistan Stock Exchange said it had posted a profit of Rs1.898 billion (EPS: Rs5.362) in the corresponding period a year earlier.

The company announced an interim cash dividend of Rs1/share for the period under review, which was equivalent to 10 percent.

Arif Habib Limited in a report said, “During 2QFY20, net sales witnessed a decline of 25 percent year-on-year to Rs2,310 million due to lower dispatches”.

“Sales also went down 19 percent year-on-year during 1HFY20; again the lower load factor was the reason behind this decline.”

Moreover due to lower demand of electricity and availability of relative cheaper sources of power (coal and hydroelectric), the load factor of FO (fuel oil) based plants remained very low, the brokerage house added.

It further said the gross margins of the company increased by 30pps year-on-year to 69 percent due to 21 percent rupee depreciation and lower load factor.

Finance costs also jumped 45 percent year-on-year to Rs329 million that can be attributed to the higher interest rate and short-term borrowing.

Askari Bank yearend profit up 59 percent

Askari Bank Limited reported its profit surged 59 percent to Rs7.032 billion for the year ended December 31, 2019 -an EPS of Rs5.58.

A statement said the bank had earned Rs4.428 billion (EPS: Rs3.51) for the full-year 2018.

For the period under review, the bank declared a final cash dividend of Rs1.50/share -equivalent to 15 percent.

It said its net interest income settled at Rs22.1 billion, improving 19 percent year-on-year and 10 percent quarter-on-quarter, which was in line with the market expectations.

Arif Habib Limited in a note said, “The bank booked a hefty capital gain in 4Q, which settled at Rs636 million, 9.5x higher quarter-on-quarter, while fee income also jumped 16 percent year-on-year and 22 percent quarter-on-quarter”.

The brokerage added that the bank booked a net provisioning of Rs773 million during CY19, 47 percent lower year-on-year.

“A nominal net charge of Rs42 million was booked in 4Q (-91 percent quarter-on-quarter), which we view was supported by reversals of impairment charges on equity portfolio,” Arif Habib Limited said in its report.

It further said the bank’s operational expenses increased 16 percent year-on-year and 13 percent quarter-on-quarter, while cost/income declined to 64 percent for CY19

against 70 percent in the same period a year earlier.

Furthermore, effective tax rate settled at 32 percent for CY19 with a nominal 17 percent being booked during 4QCY19 possibly due to utilisation of deferred tax asset.