Feroze1888 Mills' profits decline by 51% during FY20 owing to higher expenses

MG News | September 14, 2020 at 03:07 PM GMT+05:00

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September 14, 2020 (MLN): Feroze1888 Mills Limited has earned a profit of Rs. 2.94 billion (EPS: 7.8) during the year ended June 30, 2020, i.e. almost 51% lower than the amount earned in the previous year.

The Board of Directors of the company also recommended a final cash dividend for the year at Rs. 0.59 per share i.e. 5.9%. This is in addition to interim dividend already paid at Rs. 1.75 per share i.e. 17.5%.

According to the company’s financial results, the revenue grew by 6.3%, whereas the cost of sales increased by 9.7%, causing the gross profit to decline by 3.1%.

The company also experienced a 12.3% and 11.1% rise in its distribution and administrative expenses, respectively. Other setbacks came in the form of an 87.2% increase in other expenses and 89.3% decline in non-core income.

On top of that, the company suffered a 1.22x increase in its finance cost and around 50% increase in income tax expense, thus, leading to such a substantial decrease in yearly profits.

Financial Results for the year ended June 30, 2020 (Rupees’000)
	Jun-20	Jun-19	% Change
Sales	31,205,677	29,348,438	6.3%
Cost of sales	(23,698,998)	(21,600,408)	9.7%
Gross profit	7,506,679	7,748,030	-3.1%
Distribution expense	(2,276,372)	(2,026,890)	12.3%
Administrative expenses	(1,150,779)	(1,035,928)	11.1%
Other expenses	(667,832)	(356,736)	87.2%
Other income	218,888	2,048,510	-89.3%
Finance cost	(346,959)	(155,892)	122.6%
Profit before taxation	3,283,625	6,221,094	-47.2%
Taxation	(346,404)	(231,284)	49.8%
Profit after taxation	2,937,221	5,989,810	-51.0%
Earnings per share	7.8	15.9	-50.9%

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