(Corrects analyst’s forecast in sixth paragraph of story first published yesterday.)
Oct. 26 (Bloomberg) -- D.G. Khan Cement Ltd., Pakistan’s second-biggest producer of the building material, said first-quarter net profit rose because of higher prices.
Net income rose to 355.5 million rupees ($4.1 million), or 0.81 rupee a share, in the three months ended Sept. 30, from 46.3 million rupees, or 0.11 rupee, a year earlier, the Lahore-based company said in a statement to the Karachi Stock Exchange today. Sales rose to 5.3 billion rupees from 3.7 billion rupees.
Cement prices increased 25 percent to 400 rupees for a 50 kilogram bag in the north of the country during the three months ended Sept. 30, BMA Capital Management Ltd., a brokerage firm, wrote in an Oct. 20 note to clients while maintaining a “buy” stance on the stock.
“We expect the growth momentum to continue going into the second quarter on the back of a further 15-rupee hike in the cement price,” Farid Aliani wrote in the report. “Should the government decide to eliminate the subsidy on electricity another round of price hikes cannot be ruled out going forward.”
Domestic sales of the building material rose 10.6 percent to 1.6 million metric tons in August, the All-Pakistan Cement manufacturers Association said on Sept. 22. Exports fell 9.5 percent to 1.5 million tons during the two months ended Aug. 31 and local sales increased 13.6 percent to 3.7 million tons.
Total cement sales, both local and overseas, are expected to rise 8 percent to 33.9 million tons in the year ending June, Aliani said.
D.G. Khan’s shares rose 1.9 percent to 22.22 rupees as of the 3:30 p.m. local time close on the Karachi Stock Exchange.
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