September 15, 2020 (MLN): Avanceon Group announced its financial results for the half-year ended June 30, 2020, on Tuesday, which showed profits of Rs. 427 million (EPS: 2.02), i.e. 17% lower as compared to the same period of last year.
The company performed fairly well in terms of revenue, which showed a growth of 19% during the period under review. On the contrary, the cost of sales surged by 17%. The impact of these two changes led to a 22.2% growth in gross profit.
According to Arif Habib Limited, gross margins remained almost constant at 28%. During 2QCY20, gross profit clocked in at Rs. 220 million, decreasing by 35% as compared to the previous quarter and margins receding to 21% as compared to 35% in 1QCY20.
The deterioration in margins was primarily on account of low revenue recognition during 2Q from certain contracts in Qatar, Dubai, and Pakistan, owing to the fallout of COVID-19 on the business environment. The management expects to cover most of the suspended revenue in 3Q, the report added.
While there was an increase of 21% in admin & selling expenses, the company got some respite from a 9% decline in non-core expenses.
There was a fall of 35.5% in other income due to lower exchange gains earned by the company during the period.
The company also booked a tax reversal of Rs. 7.43 million during the six months due to the recognition of deferred tax assets.
Financial Results for the half-year ended June 30, 2020 (Rupees) |
|||
---|---|---|---|
Jun-20 |
Jun-19 |
% Change |
|
Revenue |
1,999,482 |
1,684,972 |
18.7% |
Cost of sales |
(1,441,032) |
(1,228,086) |
17.3% |
Gross profit / (loss) |
558,450 |
456,886 |
22.2% |
Administrative and selling expenses |
(365,383) |
(301,181) |
21.3% |
Other expenses |
(2,504) |
(2,765) |
-9.4% |
Other income |
283,945 |
440,199 |
-35.5% |
Finance cost |
(54,840) |
(51,594) |
6.3% |
Profit / (loss) before taxation |
419,668 |
541,544 |
-22.5% |
Taxation benefit / (expense) |
7,438 |
(25,445) |
-129.2% |
Profit / (loss) for the period |
427,106 |
516,099 |
-17.2% |
Earnings per share |
2.02 |
2.44 |
-17.2% |
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