DG Khan Cement Posts Rs. 542 Million Profit for FY24

D.G. Khan Cement Company Limited (DGKC) announced its financial result for FY24 today, posting a profit of Rs. 542 million (EPS: PKR 1.24) compared to a loss of Rs. 3.6 billion (LPS: PKR 8.30) in SPLY. During 4QFY24 the company reported a loss of Rs. 1.69 billion (LPS: PKR 3.86). Topline during FY24 arrived at Rs. 66 billion, depicting an uptick of 2 percent YoY in contrast to Rs. 64.9 billion in SPLY, on the back of higher retention prices, according to Arif Habib Limited. However, during 4QFY24 net sales remained flat at Rs. 16.98 billion. Gross margins for FY24 climbed up by 124 bps arriving at 16 percent owed to higher cement prices in tandem with a fall in coal prices during the period. In 4QFY24 gross margins came at 8 percent vis-à-vis 11 percent in SPLY. This was primarily attributable to an increase in exports arriving at 453,000 tons (up 5 percent YoY). Selling and Distribution expenses in FY24 surged by 43 percent YoY to settle at Rs. 2.6 billion, on the back of elevated freight charges given higher export sales, we view In 4QFY24, selling and distribution expenses arrived at Rs. 992 million vis-à-vis Rs. 770 million, a jump of 29 percent due to the aforementioned reason. Other income for FY24 ascended by 30 percent YoY, which is mainly due to higher dividend income from MCB. Finance costs in FY24 increased by 19 percent YoY to clock in at Rs. 8 billion on the back of higher interest rates. In 4QFY24, the finance cost arrived at Rs. 1.92 billion, displaying a rise of 3 percent YoY due to the reason stated above. The company booked effective taxation at 81 percent in FY24 amid amendments made in tax laws where normal tax is charged on the sale of exports (compared to presumptive tax). During SPLY effective taxation arrived at 215 percent due to the imposition of super tax which was retrospective.