Gul Ahmed profit falls 40% in first quarter

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MG News | October 28, 2024 at 09:57 AM GMT+05:00

October 28, 2024 (MLN): Gul Ahmed Textile Mills Limited (PSX: GATM) posted a 40.2% decline in its net profit during the quarter ending September 2024 despite higher revenue.

The company earned a profit after tax of Rs356.94 million [EPS: Rs0.48] during Q1 FY25 compared to Rs596.79m [EPS: Rs0.81] recorded in the same period last year (SPLY).

Its shares slumped over 5% during intraday trade Monday.

The decline comes despite a higher revenue of Rs42.08bn as compared to Rs35.64bn in SPLY.

That was because the cost of sales surged by 21.7%, worsening the gross profit by 10.5% to Rs3.57bn in Q1 FY25.

Its gross margins fell to 8.5% as compared to 11.2% in SPLY.

During the period under review, other income marked an increase of 87.2% to stand at Rs943.81m in Q1 FY25 as compared to Rs504.26m in SPLY.

On the expense side, the company's administrative expenses fell 0.3% from a year ago to Rs947.02m, selling and distribution expenses rose 48.4% to Rs1.1bn, and other operating expenses fell 48.0% to Rs47.61m.

The company’s finance cost skyrocketed by 9.5% and stood at Rs1.74bn as compared to Rs1.59bn in SPLY, mainly due to higher interest rates.

On the tax front, the company paid a lower tax worth Rs315.22m against an expense paid worth Rs521.35m in the corresponding period of last year, a fall of 39.5%.

This translates to an effective tax rate of 46.9% as compared to 46.6% in SPLY.

Unconsolidated (un-audited) Financial Results for quarter ended September 30, 2024 (Rupees in '000)
  Sep 24 Sep 23 % Change
Sales 42,078,103 35,641,767 18.06%
Cost of sales (38,509,492) (31,652,884) 21.66%
Gross Profit/ (loss) 3,568,611 3,988,883 -10.54%
Administrative Expenses (947,022) (949,430) -0.25%
Selling And Distribution Expenses (1,104,047) (743,861) 48.42%
Other Income 943,806 504,259 87.17%
Other Operating Expenses (47,605) (91,562) -48.01%
Finance Cost (1,741,584) (1,590,148) 9.52%
Profit/ (loss) before taxation 672,159 1,118,141 -39.89%
Taxation (315,224) (521,354) -39.54%
Net profit/ (loss) for the period 356,935 596,787 -40.19%
Basic earnings/ (loss) per share 0.48 0.81 -

Amount in thousand except for EPS

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