DG Khan Cement Company Limited: Growth momentum continues – By Azee Research
DG Khan Cement Company Limited (DGKC) announced its half yearly financial results ended December 2015. During the year, the company earned after tax profit of Rs 4.08 billion (EPS: Rs 9.31), which resulted in 20% YoY growth against Rs 3.39 billion (EPS: Rs 7.75) it achieved last year. This increment was attributed to more plant operational days, higher cement production, surge in cement sales, stable cement prices, declined coal prices and low furnace oil prices which lead to low cost captive electricity.
Cement Dispatches increased despite thin exports: During the period under review, the company dispatched 2.01 million tons of cement, up 7.3% as against 1.87 million tons it dispatched during the same period last year. Export sales got major hit of 21.7% decline, however, better local dispatches paved the way. On the other hand, the company managed to grow 7.2% of its clinker production. Company recorded net sales of Rs 13.6 billion versus Rs 12.65 billion showing 8% YoY growth. While cost of sales decreased by 4% to Rs 8.14 billion versus Rs 8.52 billion in 1HFY15 due to due to lower coal prices and sharp reduction in furnace oil prices. Gross profit massively surge by 33% to Rs 5.48 billion versus Rs 4.13 billion due to higher volumetric sales and lower fuel cost.
New Plant updates: Leveling and grading work for the new plant is underway at Hub site. The company has already opened Letter of Credits for mills and packing plant in favor of Loesche GMBH and Haver & Boecker of Germany. Civil work contracts for Hub project have been awarded and mobilization executed at site. On the other hand, new machinery parts areon their way and are likely to arrive from the first quarter of FY17. Furthermore, 30MW captive coal power project is anticipated to embrace timely completion and expected to start operating by the end of last quarter of FY16.
By: Azee Securities (Pvt.) Limited