ASTL sees 98% profit growth during 9MFY22

April 21, 2022 (MLN): Amreli Steel Limited (ASTL) has made profits of Rs1.83 billion in 9MFY22, depicting a robust growth of 98% YoY compared to Rs925 million in 9MFY21, the company filing on PSX showed on Thursday.

The remarkable jump in profits has been reflected in the earnings per share of the company which has increased from Rs3.12 per share in 9MFY21 to Rs6.18 per share in 9MFY22.

This improved profitability is due to better rebar retention prices, the decline in operating cycle given higher pricing power and growth in the south region and lower provision for doubtful debt, a research note by Foundation Securities said.

During the period under review, the company witnessed notable growth in its top line as it jumped by 56 %YoY to Rs45bn amid better price retention. While the gross margins remained flat at 12% due to a 56% increase in the cost of sales.

On the cost front, the distribution and administrative expenses surged by 23% and 31% YoY to stand at Rs810mn and Rs660mn, respectively.

Meanwhile, the finance cost of the company climbed by 22% YoY to Rs1.5bn in 9MFY22 owing to enhanced borrowing to finance working capital requirements coupled with higher interest rates

On the tax front, the effective tax rate stood at 13% in 9MFY22 as opposed to 0.19% in SPLY, which restricted the bottom-line growth.

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