D.G. Khan Cement Reports Turnaround with Strong Q4 Earnings

Karachi: D.G. Khan Cement Company Ltd. (DGKC) has reported a significant turnaround in its financial performance for the fourth quarter of the fiscal year 2025, achieving earnings of PkR3.2 billion (EPS: PkR7.2). This marks a substantial recovery from the previous year’s corresponding period, where the company recorded a loss of PkR1.7 billion (LPS: PkR3.9). The improved results have exceeded market expectations, primarily attributed to enhanced margins and a reduced effective tax rate during the quarter. The company also declared a final cash dividend of PkR2.0 per share.

Despite a slight revenue decline of 1% year-over-year to PkR16.8 billion, down from PkR17.0 billion in the same period last year, the company managed to improve its financial standing. This revenue reduction was largely due to a 1.2% decrease in total offtakes, amounting to 1.28 million tons.

The company’s gross margins saw a notable increase to 31.8%, compared to 7.9% in the previous year’s same quarter. This improvement was supported by a reduction in coal prices and grid tariffs, which played a crucial role in enhancing profitability.

Operating expenses were recorded at PkR1.3 billion, reflecting a 2% decrease year-over-year, predominantly due to lower distribution expenses. Additionally, the finance cost experienced a substantial drop of 70% year-over-year to PkR571 million, driven by a 36% reduction in outstanding debt and a decrease in interest rates.

The effective tax rate for the quarter stood at 26%, a decrease from 44% in the third quarter of FY25, bringing the full-year effective tax rate to 33%. These factors contributed to a full-year earnings total of PkR8.7 billion (EPS: PkR19.8), representing a 16-fold increase from PkR0.5 billion (EPS: PkR1.2) in the previous fiscal year.

The company’s stock is currently under review, as it continues to evaluate its financial strategy and market position.