DGKC: Higher finance cost and lower margins hurt bottom line

September 17, 2020 (MLN): D. G. Khan. Cement (DGKC) has announced its FY20 financial results, wherein the company reported a net loss of Rs 2.229 billion (LPS: Rs 5.05), against a net profit of Rs 1.864 billion (EPS: Rs 4.16) in FY19.

The loss is attributed to gross margins attrition that clocked in at 5% in FY20 compared to 13% in the corresponding period last year. As per research by Spectrum, this decline in margins was due to weak cement prices and rupee devaluation, resulting in a higher cost of production.  

The other major highlight is colossal finance cost which increased by around 42% YoY to Rs 5.11 billion, hurting the financial stability of the company.  However, a tax reversal of Rs 1.57 billion provided much-needed respite to the bottom line.

Consolidated Profit and Loss Account for the year ended  June 30, 2020 ('000 Rupees)

 

Jun-20

Jun-19

% Change

Sales

 41,592,685

 43,627,007

-4.66%

Cost of sales

 (39,626,910)

 (37,952,807)

4.41%

Gross profit

 1,965,775

 5,674,200

-65.36%

Administrative expenses

 (741,877)

 (711,122)

4.32%

Selling and distribution expenses

 (1,786,905)

 (1,330,984)

34.25%

Net impairment losses on financial assets

 (158,730)

 (22,343)

610.42%

Changes in fair value of biological assets

 305,256

 335,739

-9.08%

Other expenses

 (710,899)

 (530,452)

34.02%

Other income

 2,433,728

 2,474,759

-1.66%

Finance cost

 (5,111,350)

 (3,609,744)

41.60%

(Loss)/Profit before taxation

 (3,805,002)

 2,280,053

Taxation

 1,575,816

 (415,170)

(Loss)/Profit after taxation

 (2,229,186)

 1,864,883

(Loss)/Earnings per share – basic and diluted (Rupees)

 (5.05)

 4.16

 

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Posted on: 2020-09-17T16:20:00+05:00

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