Interloop: Profitability increases more than twofold

February 16, 2021 (MLN): Interloop Limited has posted more than a twofold increase in net profits after tax from Rs 1.23 billion to Rs 2.77 billion during 1HFY21.

This reflected in the company’s earnings per share which jumped from Rs 1.41/sh in 1HFY20 to Rs 3.18/sh in Jul-Dec FY21.

Alongside, financial results, the company announced a cash dividend of Rs 1.50/sh for the year ended June 30, 2021.

Despite challenging business environment fraught with potentially adverse implications of Covid-19 pandemic on the economy, ILP’s performance during the period under consideration has remained promising as the Company recorded net sales of Rs. 26.56 billion and gross profit of Rs.6.47 billion compared to a net sale of Rs. 19.42 billion and gross profits of Rs. 4.38 billion in the corresponding period of the last year, witnessing an increase of 36.74% in the net sales and 47.75% in the gross profit, respectively.

This significant increase in net sales was primarily due to hosiery utilization at 100% post revival of economic activity, increase in the utilization of the denim plant given the addition of new customers, and addition of new machineries in its hosiery division.

Gross Margins during the period clocked in at 24%, as compared to the corresponding period where margins were recorded at 23%. The increase is largely driven by efficient operations.

However, on the cost side there was an increase in admin, distribution, and other operating expenses by 14.47%, 15.13%, and 75.66% respectively followed by an increase in the finance cost of Rs. 45.56 million as compared to amounts reported in the corresponding period of the last year.

The effective tax rate of the company improved to 7% compared to 11% in 1HFY20.

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