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Hi-Tech Lubricants: Treading towards profitability

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April 26, 2021 (MLN): Hi-Tech Lubricants (HTL) has unveiled financial results of the period ended 9MFY21 today, wherein the company managed to post net profits of Rs508.02million compared to the loss of Rs92.43mn in the same period last year (SPLY).

This translated into earnings per share of the company which stood at Rs4.38/sh against the loss per share of Rs0.8/sh. However, the company has not announced any dividends along with the results.

The increase in profitability largely attributed to the higher volumetric sales which clocked in at Rs10.68bn as a result of stimulation in construction and allied industries, strong performance of large-scale manufacturing, stable exchange rate, and improved exports after the restoration of economic activities.

Even though the company offered 5x higher discounts and paid 2x higher sales tax compared to the same period last year, the net sales went up significantly by 95% YoY to Rs7.25bn largely on the back of higher international PTA prices and production. However, despite a rise in net sales, the gross margin of the company shrank to 23% from 26% in SPLY mainly due to a more than twofold increase in the cost of sales.

On the expense side, Distribution and Administration cost inclined by 14% and 18%YoY respectively. While other expenses surged by a whopping 98%YoY.

The income from other sources dropped by 21% YoY owing to lower income from financial assets.

On the financial front, the company observed a decline of 60% in finance cost to Rs77mn compared to Rs192mn in the corresponding period last year. The decline in finance cost reflects the expansionary monetary policy and lower interest rate provided to support the businesses during the COVID-19 pandemic.

Moreover, the company witnessed a 2.2x YoY increase in its tax expenses which put a check on the company’s profitability.

Consolidated Financial Results for the nine months period ended March 31, 2021 (Rupees)
  Mar-21 Mar-20 % Change
GROSS REVENUE                                    10,679,855,294                               5,224,174,647 104%
Discounts                                       (501,916,366)                                  (95,183,581) 427%
Sales tax                                    (2,924,166,185)                             (1,416,563,779) 106%
NET REVENUE                                      7,253,772,743                               3,712,427,287 95%
COST OF SALES                                    (5,565,302,706)                             (2,749,678,702) 102%
GROSS PROFIT                                   1,688,470,037                               962,748,585 75%
DISTRIBUTION COST                                       (647,923,319)                                (569,915,219) 14%
ADMINISTRATIVE EXPENSES                                       (386,312,169)                                (328,455,017) 18%
OTHER EXPENSES                                         (37,477,460)                                  (18,948,367) 98%
                                     (1,071,712,948)                                (917,318,603) 17%
OTHER INCOME                                           83,998,354                                  106,532,080 -21%
PROFIT/(LOSS) FROM OPERATIONS                                         700,755,443                                  151,962,062 361%
FINANCE COST                                         (77,144,016)                                (192,111,670) -60%
PROFIT/(LOSS) BEFORE TAXATION                                      623,611,427                                (40,149,608)  
TAXATION                                       (115,584,161)                                  (52,280,172) 121%
PROFIT/(LOSS) AFTER TAXATION                                      508,027,266                                (92,429,780)  
PROFIT/(LOSS) PER SHARE – BASIC AND DILUTED
                                                       4.38                                             (0.80)  

 

Posted on: 2021-04-26T15:15:00+05:00

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