D.G. Khan Cement Company to announce its FY22 financial result tomorrow

DG Khan Cement Company Limited (DGKC) is scheduled to announce its FY22 financial result on 13th Sep’22 whereby we expect the company to post earnings of PKR 4,202mn (EPS: PKR 9.59) against PKR 3,721mn (EPS: PKR 8.49) in SPLY, depicting a jump of 13% YoY. This was primarily owed to a 28% growth in company topline amid strong retention prices which offset the impact of a 10% dip in dispatches to 6,539k tons.

As a result, margins remained largely stable (17.8% vis-à-vis 17.9% in FY21) despite higher coal prices, augmented electricity tariff and PKR depreciation during the year. Meanwhile the last quarter is projected to display earnings of PKR 583mn (EPS: PKR 1.33) compared to PKR 873mn (EPS: PKR 1.99) in 4QFY21, down by 33% YoY. Primary culprit behind weakness in earnings is hit on account of super tax imposition.

Whereas the bottom-line was also axed by lower margins (16.9% vs. 17.6% last year) led by volumetric decline (-30% YoY to 1,305k tons mainly due to a sharp cut in exports), higher coal prices and PKR depreciation. These will offset the impact of a massive jump in retention prices, we view. Moreover, finance costs are forecast to surge by 54% YoY attributable to augmented borrowing and higher interest rates. That said, earnings will also remain pale in comparison to the last quarter (down by 60% QoQ) owed to margin attrition (3QFY22: 18.6) given cut in revenue (25% decline in volumes QoQ to counter higher retention prices) followed by higher coal prices, increased energy tariff and PKR depreciation.

Courtesy- AHL Research

Sharing is caring

Leave a Reply