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Pakistan’s D.G. Khan Swings to Profit on Higher Cement Prices

April 18 (Bloomberg) -- D.G. Khan Cement Co., Pakistan’s second-biggest producer, swung to a third-quarter profit after prices of the building material increased.

Net income in the three months ended March 31 was 754.6 million rupees ($8.3 million), compared with a loss of 5.32 million rupees in the same period a year ago, according to a statement to the Karachi Stock Exchange. Sales rose 21 percent to 6.23 billion rupees.

“The price increase turned it around, despite volumetric decline in sales,” said Muhammad Rehan Khan, research analyst at First Capital Equities Ltd. in Karachi, who rates the stock a hold. “The company’s financial cost also eased with a decline in payments and interest rates.”

D.G. Khan’s interest costs declined 17 percent to 462.7 million rupees in the period. Pakistan’s central bank cut rates by 2 percentage points last year to support .

Cement prices increased 21 percent to 425 rupees for a 50 kilogram (110 pound) bag during the quarter, compared with 350 rupees a year ago, according to First Capital Equities Ltd.

D.G. Khan’s shares rose 2.7 percent to 40.60 rupees as of 1:01 p.m. on the Karachi Stock Exchange. The stock has doubled this year, compared with a 24 percent gain in the benchmark KSE100 index.

To contact the reporter on this story: Farhan Sharif in Karachi at fsharif2@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net

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