Earning Review: NESTLE's profitability slumps by 29% YoY

MG News | August 26, 2019 at 02:34 PM GMT+05:00

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August 26, 2019 (MLN): The first half of CY19 appeared to be tough for Nestle Pakistan Limited as its profits after tax during the period declined by 29% to Rs 4.5 billion from Rs 6.3 billion in the same period last year with EPS reported at Rs 98.6.

According to the financial results announced by the company today, despite decline in cost of sales, company’s gross profits deteriorated by 16.6% due to 7.6% drop in topline earnings.

Moreover, during the period, company’s finance cost also surged considerably by 81.8% as a result of increase in interest rates.

However, the company observed 38% 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 significant margin.

Moreover, the Board of Directors of the company announced an Interim Cash Dividend of Rs.90 per share for the aforesaid period.

Financial Result for the half year ended June 30, 2019 ('000 Rupees)
	Jun-19	Jun-18	% Change
Sales - net	57,789,111	62,585,776	-7.66%
Cost of goods sold	(40,774,935)	(42,163,200)	-3.29%
Gross Profits	17,014,176	20,422,576	-16.69%
Distribution and selling expenses	(6,939,820)	(7,837,854)	-11.46%
Administration expenses	(1,659,051)	(1,629,875)	1.79%
Operating profits	8,415,305	10,954,847	-23.18%
Finance cost	(1,480,451)	(814,169)	81.84%
Other expenses	(712,473)	(848,843)	-16.07%
Other income	158,147	120,562	31.17%
Profit before taxation	6,380,528	9,412,397	-32.21%
Taxation	(1,908,380)	(3,102,789)	-38.49%
Profit after taxation	4,472,148	6,309,608	-29.12%
Earnings per share - Basic and Diluted (Rupees)	98.61	139.13	-29.12%

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