August 13, 2021 (MLN): Amreli Steel Limited (ASTL) has posted a net profit of Rs1.34billion (EPS: Rs4.61) during FY21, a turnaround from the same period last year when it incurred a net loss of Rs1.24bn (LPS: Rs4.18).
This swing in profitability is due to impressive gross margins.
During the period under review, the company witnessed robust growth in topline as it went up by 48%YoY to Rs39bn due to a massive jump in offtakes. Resultantly, the gross margins expanded from 7% to 12% amid a significant increase in local rebar prices for the fourth quarter of FY21, a research note by Darson Securities noted.
On the cost front, the distribution and administrative expenses surged by 39% and 10% YoY to stand at Rs945mn and Rs554mn, respectively.
On the other hand, the finance cost of the company declined by 28% YoY to Rs1.65bn on the back of a decline in borrowing rate and loans repayment that helped in strengthening the bottom line. However, the company booked a tax expense of Rs15.7mn during FY21 against a tax reversal of Rs700mn in FY20.
|
Profit or Loss Account for the Year ended June 30th, 2021 (Rupees in '000) |
|||
|---|---|---|---|
|
|
Jun-21 |
Jun-20 |
% Change |
|
Sales |
39,218,453 |
26,532,144 |
47.81% |
|
Cost of sales |
(34,676,315) |
(24,718,958) |
40.28% |
|
Gross Profit |
4,542,138 |
1,813,186 |
150.51% |
|
Distribution cost |
(945,620) |
(682,078) |
38.64% |
|
Administrative expenses |
(554,616) |
(503,388) |
10.18% |
|
Allowance for expected credit losses |
69,598 |
(185,243) |
– |
|
Other expenses |
(123,789) |
(94,388) |
31.15% |
|
Other income |
45,724 |
8,167 |
459.86% |
|
Operating profit |
3,033,435 |
356,256 |
751.48% |
|
Finance costs |
(1,649,484) |
(2,299,271) |
-28.26% |
|
Profit/(loss) before taxation |
1,383,951 |
(1,943,015) |
– |
|
Taxation |
(15,692) |
700,986 |
– |
|
Profit/(loss) for the year |
1,368,259 |
(1,242,029) |
– |
|
Earnings/ (loss) per share- basic and diluted |
4.61 |
(4.18) |
– |
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