General Tyre posts losses of Rs 332 million despite presence of tax reversals

MG News | August 20, 2020 at 11:44 AM GMT+05:00

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August 20, 2020 (MLN): General Tyre and Rubber Company has incurred losses of Rs. 332 million (LPS: 2.72) during the year ended June 30, 2020, as opposed to the earnings of Rs. 122.8 million recorded in the same period of last year.

The losses were a result of a decline in the company’s sales revenue by 16%, which in turn was attributable to PKR devaluation observed throughout the year as well as a massive decline in the sale of automobiles.

Even though there was a decrease of 13% in the cost of sales, the gross profits still fell by 34% as the impact of lower sales was much higher. The earnings were further strained by a 45% increase in finance cost.

Nonetheless, the losses were curtailed by factors such as a decline in other expenses by 84%, which translates into cost savings of nearly Rs. 110 million, as well as the presence of tax reversals amounting to Rs. 114.5 million.

Financial Results for the year ended June 30, 2020 (Rupees'000)
	Jun-20	Jun-19	% Change
Sales-net	8,793,341	10,486,282	-16.1%
Cost of sales	(7,744,581)	(8,896,798)	-13.0%
Gross Profit	1,048,760	1,589,484	-34.0%
Administrative expenses	(275,675)	(296,870)	-7.1%
Distribution cost	(415,593)	(395,422)	5.1%
Other income	68,106	69,939	-2.6%
Other expenses	(20,605)	(130,761)	-84.2%
Finance cost	(848,806)	(585,032)	45.1%
Share of (loss) / profit of an associated company	(2,851)	2,299
(Loss) / profit before taxation	(446,664)	253,637
Taxation reversal / (charge)	114,573	(130,761)
(Loss) / profit for the year	(332,091)	122,876
(Loss) / earnings per share	-2.72	1.01

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