International Industries’ net profitability plummets by 92% YoY

January 30, 2020 (MLN): Weak demand for steel products from construction, automotive and other key downstream industries adversely affected International Industries Limited (INIL)’s net profits for the half-year ended December 31, 2019, as it went down considerably by around 92% YoY to Rs 170.2 million. Whereas, in the corresponding period of last year the company posted net profits of Rs 2 billion.

The decline in profitability was primarily attributable to the key challenges that the company had to face during the period mentioned above which includes the higher cost of financing, gas input, and freight due to implementation of axle load regime.

Although the company’s net revenues remained at the same level, margins came under extreme pressure as it shrank by 3ppts to 9% compared to the corresponding period of last year due to higher interest rates and high freight cost due to axle load restriction.

Even though the company enjoyed a tax concession of Rs 315.4 million, the impact failed to lift the company’s profitability.

Moreover, the company stated a loss per share of Rs 0.93 against the Earning per share of Rs 9.86 reported last year.

Financial Results for the six months ended December 31, 2019 (Rupees in '000)

 

Dec-19

Dec-18

% Change

Net sales

 34,285,359

 34,214,147

0.21%

Cost of sales

 (31,312,004)

 (30,017,826)

4.31%

Gross profit

 2,973,355

 4,196,321

-29.14%

Selling and distribution expenses

 (614,162)

 (687,349)

-10.65%

Administrative expenses

 (299,794)

 (296,337)

1.17%

Impairment reversal on trade debts

 21,649

 11,045

96.01%

Finance cost

 (1,922,033)

 (991,245)

93.90%

Other operating charges

 (13,927)

 (207,557)

-93.29%

Other income

 100,544

 419,547

-76.04%

Share of profit in equity accounted investee – net of tax

 (3,485)

 18,788

(Loss) / Profit before taxation

 242,147

 2,463,213

-90.17%

Taxation

 (71,863)

 (387,300)

-81.45%

(Loss) / Profit after taxation for the year

 170,284

 2,075,913

-91.80%

Earnings per share – basic and diluted (Rupees)

 (0.93)

 9.86

 

 

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Posted on: 2020-01-30T15:42:00+05:00

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