Despite higher sales, DG Khan Cement Company Limited (DGKCL), one of the largest cement producers in Pakistan, saw its profit drop significantly in the quarter ended December 31, 2023.
As per the latest consolidated financial results, DGKC’s profit-after-tax (PTA) clocked in at Rs515.5 million in 2QFY24, a decline of nearly 35% as compared to PAT of Rs791.03 million in the same period of the previous year.
The company’s Earnings per Share (EPS) decreased to Re0.86 per share against Rs1.51 in SPLY.
The drop in profit is attributed to an increase in cost of sales and finance during the period.
DG Khan Cement’s net revenue increased nearly 11% to Rs19.76 billion as compared to Rs17.88 billion recorded in the previous year. Meanwhile, the cost of sales jumped to Rs17.1 billion in 2QFY24, as compared to Rs15.35 billion recorded in the previous year.
Resultantly, the gross profit stood at Rs2.68 billion in 2QFY24, as compared to Rs2.53 billion, an increase of nearly 6%.
However, the profit margin of the cement maker dipped from 14.1% in 2QFY23 to 13.6% in 2QFY24.
Meanwhile, the company’s cost of finance jumped from Rs1.72 billion to Rs2.2 billion, a yearly increase of over 26%.
As a result, the cement maker profit before tax reduced to Rs925.55 million in 2QFY24, as compared to Rs1.08 billion in SPLY.
During the period, DGKCL paid higher taxes to the tune of Rs410.1 million, as compared to Rs293.8 million in SPLY, up nearly 40%.
Solar power generation
In another announcement, the BoD of DG Khan Cement, in its bid to diversify the power mix and reduce the power cost, approved the installation of an approximately 3MW solar power plant at the Khairpur Site.
“After its installation, total solar power capacity at Khairpur site will increase to 9.9MW,” read the notice.
DGKCL produces a variety of cement products, including ordinary portland cement (OPC), portland composite cement (PCC), and sulphate-resistant cement (SRC). The company also produces specialty cement such as white cement and oil well cement.
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