Cherat Packaging's bottom-line profit growth saved by tax reduction

MG News | August 30, 2018 at 03:08 PM GMT+05:00

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Cherat Packaging Limited’s annual profits improved slightly from Rs.702 million during the year ended June 30th 2017 to Rs.711 million during the year ended June 30^th 2018, as a result of a major drop in tax provisions.

The company conducted its Board of Directors meeting on August 30, 2018 in order to review the financial earnings for the year and to provide a detailed comparison

Top-line earnings of Cherat Packaging rose by 10% while cost of sales increased by 15.5% leading to 12.6% drop in gross profits.

This led to 13.8% drop in operating profits while finance cost increased by twice the cost during the same period last year. Together, the two components resulted in 21.4% reduction in profits before taxation.

Since provision for taxation reduced by 80%, the overall profit for the period increased by 1.3%.

Moreover, earnings per share came down from Rs.22.81 per share to Rs.2.79 per share.

Profit and loss account for the year ended June 30th 2018 ('000 Rupees)
	Jun-18	Jun-17	% Change
Turnover - net	7,091,653	6,443,932	10.05%
Cost of sales	(5,993,321)	(5,187,454)	15.53%
Gross profit	1,098,332	1,256,478	-12.59%
Distribution costs	(98,022)	(117,198)	-16.36%
Administrative expenses	(75,475)	(62,145)	21.45%
Other expenses	(60,661)	(60,582)	0.13%
Other income	28,971	20,508	41.27%
Operating profit	893,145	1,037,061	-13.88%
Finance cost	(128,262)	(64,118)	100.04%
Profit before taxation	764,883	972,943	-21.38%
Taxation	(53,804)	(270,894)	-80.14%
Net profit for the year	711,079	702,049	1.29%
Basic and diluted earnings per share (Rupees)	2.79	22.81	-87.77%

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