DGKC’s 3QFY24E earnings are expected to clock in at PkR1.49/sh

The board of DGKC will announce its 3QFY24E result on Friday. We expect the company to post a PAT of PkR653mn (EPS: PkR1.49) compared to earnings of PkR403mn (EPS: PkR0.92) in the previous quarter, an increase of 62.3% QoQ.

Earnings growth is majorly attributable to improved gross margins. Revenue is expected to decrease by 18.7% QoQ due to a decline in sales volume, with total sales dropping by 24% QoQ to 1.04mn tons (vs. 1.37mn tons in 2QFY24).

Gross margins are expected to improve to 16.7% vs. 12.8% in the previous quarter due to a 1% quarterly increase in the retention price along with a decline in weighted average coal cost in South. Moreover, other income is expected to clock in at PkR1.1bn (↓17%QoQ/↑47%YoY), with the annual increase due to higher dividend income from banking associates.

Furthermore, financial charges are expected to decline by 17% QoQ to PkR1.7bn during the quarter amid a drop in total borrowings and a slight decline in average KIBOR rates.

Courtesy – AKD Research

 

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