General Tyre’s profitability weakens on lower auto sales

By MG News | February 20, 2020 at 02:08 PM GMT+05:00

0:00

February 20, 2020 (MLN): General Tyre and Rubber Co. (GTYR) has announced its financial results for the half-year ended December 31. 2019, as per which, the company has posted its net profits of Rs 29.3 million i.e., lower by 68% YoY against Rs 91 million of last year.

The decline in profitability of the company was mainly attributed to the lower auto sales and PKR depreciation.

During the period, the company’s revenue declined by 9% YoY to Rs 4.56 billion but more than a proportionate decrease in the cost of sales caused gross profits to increase marginally by 1% YoY to Rs 752 million.

On the cost front, the administrative expenses and other expenses plunged by 13% YoY and 93% YoY respectively whereas distribution expenses jump by only 2% YoY.

More notably, the colossal increase in finance cost by 93% YoY, from Rs 222 million to Rs 429million damaged the company’s performance owing to higher borrowings with higher interest rates.

GTRL’s basic and diluted earnings per share have been reported at Rs 0.24 per share while those recorded last year were Rs 0.75 per share.

Financial Results for the half-year ended December 31, 2019 (Rupees in '000)
	Dec-19	Dec-18	% change
Sales-net	4,564,320	5,016,091	-9%
Cost of sales	(3,811,685)	(4,274,482)	-11%
Gross profit	752,635	741,609	1%
Administrative expenses	(137,699)	(158,250)	-13%
Distribution expenses	(204,955)	(201,443)	2%
Other income	68,548	38,080	80%
Other expenses	(4,746)	(71,724)	-93%
Profit from Operations	473,783	348,272	36%
Finance Cost	(429,729)	(222,295)	93%
	44,054	125,977	-65%
Share of (loss)/profit of an associated company	(589)	3,439	-
Profit before taxation	43,465	129,416	-66%
Taxation	(14,175)	(38,303)	-63%
Profit after taxation	29,290	91,113	-68%
Earnings per share-basic and diluted	0.24	0.75	-68%

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