Earnings Preview: Higher finance cost, margin attrition to deteriorate DGKC’s net earnings

MG News | February 13, 2020 at 10:54 AM GMT+05:00

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February 12, 2020 (MLN): The board meeting of DG Khan Cement (DGKC) is scheduled to announce its financial results for 1HFY20 on Thursday i.e. today

According to the projection table given below, all brokerage houses expect the company to post a net loss of around Rs 2.46 billion to Rs 3.14 billion which translate into an LPS ranging from Rs 5.40- Rs 7.17.

Research House	1HFY20E Net loss	Loss per share (LPS)	1HFY19A Net profits
Alfalah	Rs 2.49 billion	Rs 5.79	Rs 1.742 billion
Arif Habib	Rs 2.60 billion	Rs 5.94	Rs 1.742 billion
Fortune	Rs 3.14 billion	Rs 7.17	Rs 1.742 billion
Pearl	Rs 2.60 billion	Rs 5.95	Rs 1.742 billion
Darson	Rs 2.46 billion	Rs 5.63	Rs 1.742 billion
Al Habib Capital	Rs 2.69 billion	Rs 6.16	Rs 1.742 billion
Insight	-	Rs 6.36	Rs 1.742 billion
Topline	-	Rs 5.89	Rs 1.742 billion
AKD	-	Rs 5.40	Rs 1.742 billion
IMS	-	Rs 6.58	Rs 1.742 billion
NEXT	-	Rs 5.87	Rs 1.742 billion

During the period under review, the topline earnings of the company are expected to increase owing to a recovery in local dispatches while the gross profits of the company are predicted to fall in 1HFY20 due to higher cost pressures.

Moreover, the company’s other income is forecasted to fall due to fewer dividends from associated entities.

The distribution expenses are anticipated to increase on an account of higher export sales from south plants with further damages expected from huge finance cost, pertaining to excessive borrowing with a high cost of debt.

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