DGKC: Lower retention prices and finance cost erode net earnings
MG News | October 25, 2019 at 01:23 PM GMT+05:00
October 25, 2019 (MLN): DG Khan Cement Company Limited (DGKC) has announced its financial earnings today for the quarter ended on September 30th 2019, as per which, the company has borne a net losses after tax of Rs.1.44 billion (LPS: Rs 3.30), as compared to net profits of Rs. 341 million (EPS: Rs 0.78) in the corresponding quarter of last year.
The massive decline in company’s overall earnings was primarily driven by the result of contraction in gross margins (-5 pps YoY) on the back of lower retention prices on domestic cement sales, higher distribution costs ((2x YoY) along with upsurge in finance cost (2x YoY).
Top-line earnings increased by 11.12% YoY, to Rs 9.7 billion due to upsurge in dispatches of the company.
The company’s selling and distribution cost soared by 2.7x YoY on the back of higher freight charges on exports.
In addition, the escalation in finance cost to Rs 1.3 billion was due to higher borrowing rates as against the comparative period.
| Consolidated Profit and Loss Account for the quarter ended September 30, 2019 ('000 Rupees)
| |||
|---|---|---|---|
|
| Sep-19 | Sep-18 | % Change |
| Sales | 9,765,763 | 8,788,734 | 11.12% |
| Cost of sales | (10,255,008) | (7,709,856) | 33.01% |
| Gross profit | (489,245) | 1,078,878 |
|
| Administrative expenses | (169,881) | (187,198) | -9.25% |
| Selling and distribution expenses | (486,307) | (183,919) |
|
| Other operating expenses | (39,159) | (83,621) | -53.17% |
| Changes in fair value of biological assets | 93,318 | 27,196 |
|
| Other income | 582,983 | 475,048 | 22.72% |
| Finance cost | (1,378,108) | (650,853) |
|
| (Loss)/Profit before taxation | (1,886,399) | 475,531 |
|
| Taxation | 439,617 | (133,975) |
|
| Profit after taxation | (1,446,782) | 341,556 |
|
| (Loss)/Earnings per share - basic and diluted (Rupees) | (3.30) | 0.78 |
|
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