DG Khan Cement's net earnings topple on account of shooting finance cost

MG News | April 24, 2019 at 01:14 PM GMT+05:00

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April 24, 2019 (MLN): DG Khan Cement Company (DGKC)’s nine months’ cumulative earnings have logged in at Rs.2.5 billion (EPS: Rs.5.71) marking a 47% decline in net earnings for the period ended March 31, 2019, as compared to the corresponding period of last year.

Against the backdrop of a weakened economy, the drop in net profit can be attributed to considerable year-on-year depreciation in the value of PKR, the rise in gas tariff, 20% YoY rise in FED and higher finance cost owing to the capitalization of Hub Plant.

The company’s topline earnings (Rs.32.6 billion) grew by 28% over the year, but when coupled with the heightened sales cost worth Rs.27.4 billion, the company’s gross profit declined by 28%, YoY.

A considerable enhancement in finance cost which stands at Rs.2.5 billion against last year’s figure of Rs.339 million, has played a major part in weighing down the overall earnings of DGKC.

Consolidated Profit and Loss Account for the nine months ended March 31, 2019 ('000 Rupees)
	Mar-19	Mar-18	% Change
Sales	32,609,651	25,395,325	28.41%
Cost of sales	(27,419,503)	(18,149,001)	51.08%
Gross profit	5,190,148	7,246,324	-28.38%
Administrative expenses	(545,122)	(514,243)	6.00%
Selling and distribution expenses	(1,025,500)	(706,839)	45.08%
Other operating expenses	(639,200)	(824,907)	-22.51%
Other income	1,823,001	1,659,492	9.85%
Profit / (loss) from operations	4,803,327	6,859,827	-29.98%
Finance cost	(2,457,596)	(339,008)	624.94%
Profit befor taxation	2,345,731	6,520,819	-64.03%
Taxation	155,037	(1,780,216)	-108.71%
Profit after taxation	2,500,768	4,740,603	-47.25%
Earnings per share - basic and diluted (Rupees)	5.71	10.82	-47.23%

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