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

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.

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