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Lahore: Descon Oxychem Limited (DOL) has announced significant financial improvements for FY25, highlighting a robust 69% year-on-year increase in earnings per share, which reached Rs4.91. The rise was largely attributed to a 10 percentage point increase in gross margins, driven by enhanced operational efficiencies and cost management strategies.
The company reported a 5% year-on-year growth in its topline, bolstered by increased volumes of Hydrogen Peroxide, which climbed to 42,000 metric tons in FY25. This growth was achieved with the plant operating at full capacity.
Cost efficiency improvements were evident as power consumption decreased from 583 kWh per metric ton to 532 kWh per metric ton. These gains, coupled with reduced RLNG prices and other cost-saving measures, contributed to the expansion in gross margins, which reached 30% for the fiscal year.
Despite a 27% decline in export sales, DOL remains optimistic about its market expansion strategies. The company is focusing on increasing its presence in Saudi Arabia and is also exploring potential opportunities in Turkey.
The domestic hydrogen peroxide market is projected to grow, with local demand expected to rise from 79,000 metric tons to 82,000 metric tons by FY28. DOL’s export pricing strategy includes rates of approximately US$350 per ton for Bangladesh and US$450 per ton for Korea, with domestic prices aligning closely with the Korean rate.
In an effort to address electricity costs, DOL is planning to install a 2MW solar power project. Additionally, a study is underway to optimize hydrogen-plant operations, aiming to reduce gas consumption and enhance the company’s competitiveness in export markets.
To support its operations, DOL sources half of its fuel requirements from captive gas, with the remaining sourced from RLNG. The company’s market is evenly divided between the South and North regions, each accounting for 50% of market share, while bulk sales contribute 30% of the company’s overall sales volumes.
As part of its operational strategy, DOL plans to conduct routine maintenance, necessitating a 2-3 week plant shutdown later this year. The company is also actively engaging with regulatory bodies to combat illicit trade and ensure a fair competitive landscape.