Today, D.G. Khan Cement Company Limited released its FY21 annual result, reporting a PAT of PKR 3.7Bn (EPS: PKR 8.5), compared to LAT of PKR 2.2Bn (LPS: PKR 4.9). The 4QFY21 PAT clocked-in at PKR 0.9Bn (EPS: PKR 2.0), compared to LAT of PKR 0.3Bn (LPS: PKR 0.7) and PAT of PKR 2.0Bn (EPS: PKR 4.7) in 4QFY20/3QFY21 respectively. The improvement in FY21 profitability was based on higher cement bag prices (↑6% YoY) and higher cement dispatches. The company also announced a dividend of PKR 1.0/sh for FY21.

Key highlights of the result are summarized below:

DGKC reported sales of PKR 45.1Bn (↑19% YoY) on the back of higher dispatches and ex-factory cement prices. The topline increased to PKR 12.4Bn (↑66/14% YoY/QoQ) in 4QFY21, owing to sharp increase in cement retail prices (↑11/2% YoY/QoQ).

FY21 gross margins increased to 17.9%, compared to 4.2% in FY20, primarily on the back of higher retention prices. The gross margins for 4QFY21 increased to 17.6% in 4QFY21, an accretion of 10.8ppt YoY due to higher dispatches and retention prices. While on a quarterly basis, the gross margin declined by 5.2ppt due to higher cost of coal inventory.

The administration expense and distribution costs showcased modest changes, to clock-in at PKR 0.65Bn (↓2% YoY) and PKR 1.95Bn (↑9% YoY).

The other expenses declined sharply by 39% YoY and dropped to PKR 414Mn, resulting in improved profitability in FY21. On the other hand, other income improved slightly to PKR 2.6Bn (↑8% YoY), due to net impairment gain.

Finance cost during the year was reported at PKR 2.9Bn, a massive decline of 37% YoY, mainly on account of stable interest rates and lower debt levels.

Courtesy – BMA Capital Management Ltd.