ILP: Profits nearly quadruple amid rise in value-added textile exports

September 16, 2021 (MLN): Interloop Limited (ILP) has posted 3.5x YoY increase in net profits after tax from Rs1.79billion to Rs6.29 billion during FY21.

In line with the profits, the company’s earnings per share jumped from Rs2.06/sh in FY20 to Rs7.21/sh in FY21.

Alongside, financial results, the company announced a cash dividend of Rs2.5/sh for FY21 i.e., 25%. Furthermore, a 3% bonus i.e. 3 shares for every 100 shares, has also been announced by the board

Despite the challenges owed, ILP continued to focus on profitable avenues, maximizing efficiency in production activities and cost realization through various means. The upsurge in the company’s profits was due to higher sales and higher profit margins.

During the period, Company’s revenues increased by 51.4% to Rs54.96bn mainly, on the back of a rise in value-added textile exports due to numerous incentives by the govt. In addition, utilization of hosiery division nearly at 100% given excess orders, higher utilization of the denim plant amid the addition of new customers, and continuous addition of new machineries in its hosiery division also contributed to higher revenues.

The gross margin of the company improved to 26% from 22% in SPLY majorly attribute to inventory gains on cotton resulting in higher Spinning segment margins, a potential rise in US$ per-unit prices of all products, and a reduction in losses in the denim segment.

On the expense side, the administrative expense and distribution cost jumped by 27% and 31.5% YoY respectively. Moreover, income from other sources jumped by 64.5% YoY mainly due to PKR devaluation, resulting in exchange gain, a report by insight Securities highlighted.

On the upside, the company managed to maintain its finance cost at Rs1.1bn due to lower short-term borrowings as well as the lower interest rates which provided a slight relief to the bottom line.

On the tax front, the company’s effective tax rate stood at 8% compared to 15% in FY20.

With higher margins and revenues, overall, the company has posted strong results and its profitability is expected to improve further in the coming quarters as the company is operating at full capacity. According to the report by IMS, ILP has booked orders for the remainder of 2021, which will continue the present growth momentum, while the Denim segment is likely to turn profitable in the coming quarters.

 

Consolidated Financial Results for the year ended June 30, 2021 ('000 Rupees)

 

Jun-21

Jun-20

% Change

Net Sales

                               54,962,265

                                        36,302,794

51.40%

Cost of Sales

                             (40,749,985)

                                      (28,439,076)

43.29%

Gross profit

                               14,212,280

                                           7,863,718

80.73%

Distribution Cost

                               (2,639,632)

                                        (2,007,264)

31.50%

Administrative expenses

                               (2,796,180)

                                        (2,197,949)

27.22%

Other operating expenses

                                   (919,479)

                                            (504,513)

82.25%

Other income

                                     162,912

                                                 99,001

64.56%

Profit from operations

                                  8,019,901

                                           3,252,993

146.54%

Finance Cost

                               (1,147,038)

                                        (1,137,162)

0.87%

Share of loss from associate

 –

                                                          –  

Profit before Taxation

                                  6,872,863

                                           2,115,831

224.83%

Taxation

                                   (581,292)

                                            (319,428)

81.98%

Profit after taxation for the year

                                  6,291,571

                                           1,796,403

250.23%

Earnings per share – basic

                                            7.21

                                                     2.06

250.00%

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Posted on: 2021-09-16T10:34:23+05:00

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