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The financial result review for D.G. Khan Cement Company Limited (DGKC) for FY24 reveals significant aspects of its performance:
Key Results:
- Profit & Loss: DGKC posted a profit of PKR 542 million for FY24 (EPS: PKR 1.24), improving from the previous year’s loss of PKR 3,636 million. However, in 4QFY24, the company recorded a loss of PKR 1,692 million, highlighting a challenging quarter.
- Topline: The company’s topline for FY24 was PKR 66,039 million, reflecting a 2% year-on-year (YoY) increase from PKR 64,984 million in FY23. However, the revenue for 4QFY24 remained flat at PKR 16,988 million.
- Gross Margins: For FY24, gross margins improved by 124 basis points, reaching 16%, primarily due to higher cement prices and a fall in coal prices. Export volume rose to 453,000 tons, an increase of 5% YoY.
Cost Dynamics:
- Selling & Distribution Expenses: These surged by 43% YoY, settling at PKR 2,609 million for FY24, largely driven by higher freight costs associated with increased exports. For 4QFY24, these expenses amounted to PKR 992 million, up 29% YoY.
- Finance Costs: The finance costs increased by 19% YoY to PKR 8,001 million due to higher interest rates. In 4QFY24, finance costs were PKR 1,928 million, showing a slight increase of 3% from the previous quarter.
Other Income:
- Other income rose by 30% YoY for FY24, attributed to higher dividend income from MCB, adding a positive offset to rising costs.
Taxation:
- Taxation: The company’s effective tax rate for FY24 was 81%, influenced by amendments in tax laws that imposed normal taxation on export sales. In contrast, during FY23, the company faced a steep effective tax rate of 215% due to a retrospective super tax.
Conclusion:
Despite a challenging 4QFY24, DGKC managed to post an annual profit, aided by improved gross margins and higher other income. Rising finance costs, higher selling and distribution expenses, and elevated taxation remain key concerns.