Earning Review: Lower tractors’ demand hits MTL’s profitability by 41%

September 5, 2019 (MLN): Millat Tractors (MTL), the largest tractor manufacturing company in the country has announced its financial results today, as per which the company reported its net annual profits for the year ended on June 30th 2019 has declined by 41% YoY to Rs 3.5 billion (EPS: Rs79.36) from Rs 5.9 billion (EPS: Rs134.64) earned last year.

Due to weak economic conditions and lower demand of tractors from agriculture sector along with higher interest rates, MTL’s net sales slumped by 19% YoY to Rs 32 billion. Thus, declined company’s gross profits by 34% YoY.

During the period, the company also witnessed a decline in income earned from other sources by 26% on account of lower dividend income from subsidiaries and interest income from bank deposits.

On the expenses side, the company’s admin expenses, distribution expenses and other operating expenses dropped by 1.24%, 4.4% and 6.9% respectively, which provided a cushion to the earnings.

Moreover, the decrease in tax payments by 46.5% YoY also provided some relief to the company, but it was not enough to prevent a fall in company’s profitability.  

Consolidated profit and loss account for the year ended June 30th 2019 ('000 Rupees)

 

Jun-19

Jun-18

% Change

Sales- net

 32,030,959

 39,586,362

-19.09%

Cost of sales

 25,202,514

 29,129,335

-13.48%

Gross profit

 6,828,445

 10,457,027

-34.70%

Distribution and marketing expenses

 698,181

 730,588

-4.44%

Administrative expenses

 758,197

 767,708

-1.24%

Other operating expenses

 641,139

 689,062

-6.95%

 

 2,097,517

 2,187,358

-4.11%

Other income

 468,793

 635,902

-26.28%

Operating profit

 5,199,721

 8,905,571

-41.61%

Finance costs

 121,552

 20,190

502.04%

Profit before tax

 5,078,169

 8,885,381

-42.85%

Taxation

 1,562,972

 2,921,862

-46.51%

Profit for the year

 3,515,197

 5,963,519

-41.05%

Basic and diluted earnings per share (Rupees)

 79.36

 134.64

-41.06%

 

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Posted on: 2019-09-05T13:39:00+05:00

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