D G Khan Cement posts LPS of Rs4.9 for FY20, a bitter pill to swallow

During FY20, D G Khan Cement (DGKC) has posted a loss of Rs2.2 billion (LPS: Rs4.9) as against a profit of Rs1.6 billion (EPS: 3.7) a year ago due to the increase in finance cost by 41%YoY, despite declining interest rate. The Company has reported loss per share (LPS) of Rs0.7 for 4QFY20 as compared to LPS of Rs2.3 for 4QFY19. Loss for the quarter under review was lower than analysts’ expectation of Rs1.2/share, mainly on account of deviation in Finance cost.

Net sales during 4QFY20 were reported at Rs7.5 billion, down 26%YoY due to decline in volumetric sales by 27%YoY. Local dispatched and exports fell by 23%YoY and 37%YoY, respectively. Gross Margins were reported at 7% during 4QFY20, broadly in line with expectations. Margins improved marginally due to decline in fuel/energy costs amidst usage of Furnace Oil. Finance costs declined by 17%QoQ due to early re-pricing of loans after the recent decline in Policy Rate. Admin expenses declined to at Rs141 million, down by 12%QoQ.

 

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