Avanceon Group records a 17% decline in earnings despite growth in revenue

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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Posted on: 2020-09-15T16:07:00+05:00

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