Currency devaluation and difficulties emanating from COVID-19 crisis decay Nestle Pakistan’s profits by 13% YoY

July 28, 2020 (MLN): Nestle Pakistan Limited has reported a 13% YoY decline in net profits after tax to Rs 3.87 billion for the half year ended on June 30^th, 2020, compared to Rs 4.47 billion earned in the corresponding period last year.

This has reflected in the company’s earnings per share which also declined by the same percentage from Rs 98.61 last year to Rs 85.47.

The decline in company’s profitability was mainly attributable lower revenues from sale during the period as it increased marginally from Rs 57.789 billion in Jan-Jun 2019 to Rs 58.39 billion due to many difficulties emanating from COVID-19 crisis and the currency devaluation impact.

In addition to this, the closure of Afghanistan border also had a major impact on the export earnings of the company.

On the expense side, company witnessed 25.59% YoY increase in admin expenses and 24.87% YoY rise in financial cost which put a check on the company’s profitability.

However, the company observed a 16.17% YoY reduction in tax payments, the overall impact on ultimate profits of the company was not adequate to pull up the profits of the company by a significant margin.

 Alongside financial results, the company also announced an Interim Cash Dividend of Rs 83 per share i.e. 830% for the period mentioned above.

Copyright Mettis Link News