In our today’s morning report we will present result previews of D.G. Khan Cement Company limited for 1HFY15 which will announce result on 17th February, 2015.
Higher effective taxation would restricts profitability growth
We expect DGKC to post marginal earnings growth of 2% as profit after tax to surge at Rs 2.71 billion which translates into EPS of Rs 6.20 in 1HFY15 against Rs 2.67 billion (EPS: Rs 6.09) in 1HFY14. Lower growth expected due to higher effective taxation of 29.2% in 1HFY15 against 23.4% in 1HFY14. However 35% QoQ growth expected during 2QFY15, as company to post profit after taxation of Rs 1.55 billion versus Rs 1.15 billion in 1HFY14, depicting surge by 35%.
Revenue to up by 1%
Net sales of the company is expected to hike by 1% YoY to Rs 12.57 billion in 1HFY15 compared to Rs 12.40 billion in 1HFY14 mainly due to higher domestic prices. On the other hand, we expect the volumetric sales of the company to remain flat at 1.87 million tons in 1HFY15 due to lower exports which likely to down by 23% in  1HFY15. However, local sales to up by 9% to 1.48 million tons in 1HFY15 against 1.35 million tons in 1HFY14. Cost of sales is expected to surge by 3% YoY to Rs 8.46 billion in 1HFY15 against Rs 8.19 billion in 1HFY14.
Gross profit likely to down 2%
Gross profit likely to fall by 2% to Rs 4.11 billion compared to Rs 4.20 billion in 1HFY14 owing to higher energy prices. Gross profit margin is expected to drop to 32.7% in 1HFY15 against 33.9% recorded in 1HFY14.

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Result Preview – DGKC

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