Amreli Steels suffers losses of Rs 1.12 billion in FY20

September 11, 2020 (MLN): Amreli Steels Limited (ASTL) has reported Rs 1.12 billion worth of net losses for FY20, against meagre profits of Rs 32.82 million earned in FY19.

Accordingly, loss per share of the company clocked in at Rs 3.79 compared to the earnings per share of Rs 0.11 reported last year.

The losses were mainly attributable to decline in sales volume and higher financial cost during the year.

The sales of the company during FY20 plunged by 7.2% YoY largely on account of weak demand and plant closure amid lockdowns.

Despite the company witnessed 6% YoY decline in cost of sales, its gross profits went down by 18.48% YoY mainly due to lower revenues.

The gross profit margins of ASTL declined to 7% during FY20 as against 8% reported in the previous year. The decline is possibly ascribed to low retentions due to larger discounts offered and un-optimal spread of fixed costs due to low volumes, a report by IGI Securities highlighted.  

The admin expenses increased slightly by 9% YoY while distribution costs exhibited a decline of 4.8% YoY. However, the finance cost significantly jumped to Rs 2.3 billion from Rs 1.2 billion due to increase in borrowing cost during the period under review.

Moreover, the company also observed tax incentives of Rs 653.8 million which provided some cushion to the earnings.

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