D.G. Khan Cement Company Limited (DGKC) announced the financial result for 1QFY23 whereby earnings arrived at PKR 389mn (EPS: PKR 0.89) against PKR 908mn (EPS: PKR 2.07) last year, down by 57% YoY. Whereas the company posted a loss in the last quarter primarily due to hit from super tax.

Result Highlights

· During 1QFY23, revenue showed a jump of 22% YoY in lieu of massive price hikes which offset the impact of a 22% dip in offtake to 1,131k tons amid torrential rains. Albeit, on a QoQ basis, sales tumbled by 8% amid a 13% dip in offtake.

· Gross margins in 1QFY23 settled at 15.3% vis-à-vis 18.8% in 1QFY22 and 17.8% in 4QFY22 led by volumetric decline, higher coal prices, augmented energy tariff, and PKR depreciation.

· Finance cost settled at PKR 1.6bn during 1QFY23, up by 2x YoY, on account of augmented borrowing as well as higher interest rates.

· The company booked effective taxation at 33% in 1QFY23 vs. 23% in SPLY, due to recognition of super tax to the tune of 4% on PBT of the quarter under review.

Courtesy – AHL Research