January 29, 2021 (MLN): International Steels Limited (ISL) has announced financial results for the 1HFY21, where the company posted a 5.95x increase in net profits to Rs 2.7 billion with earnings per share (EPS) of Rs 6.38, as opposed to the profits of Rs 465.9 million (EPS: Rs 1.07) in 1HFY20.
In conjunction with the results, the company announced a cash dividend of Rs 3 per share, i.e. 30% for the period mentioned above.
The increase in profitability can be attributed to higher revenues, up by 32% YoY on the back of rising price and volume of CRC and HDGC. Gross margins were also improved to 14.79% against 8.77% in 1HFY19, mainly due to an increase in the spread between HRC-CRC.
Furthermore, as the economy returns to the pre-covid era, the revival of the construction sector, growth in automobiles, and home appliances played a vital role in lifting the company’s profitability.
The bottom-line of the company further supported by a significant reduction in finance cost from Rs 1.3 billion to Rs 437.89 million (down by 67% YoY) due to a steep decline in interest rate.
The company also witnessed a jump in income earned from other sources, as it grew by 227% YoY, further boosted the company’s profitability.
On the tax front, the company incurred tax expenses of Rs 1.19 billion against the tax reversal of Rs 465.9 million in the same period of last year.
Financial Results for the six months ended December 31, 2020 ('000 Rupees) | |||
|---|---|---|---|
| Dec-20 | Dec-19 | % Change |
Net Sales | 33,515,947 | 25,364,552 | 32.14% |
Cost of Sales | (28,559,880) | (23,140,837) | 23.42% |
Gross profit | 4,956,067 | 2,223,715 | 122.87% |
Administrative Expenses | (145,181) | (134,732) | 7.76% |
Selling and distribution expenses | (358,837) | (441,825) | -18.78% |
Finance costs | (437,895) | (1,345,963) | -67.47% |
Other operating charges/income-net | (356,168) | 1,611 | -22208.50% |
Other income | 309,564 | 94,471 | 227.68% |
Profit before taxation for the year | 3,967,550 | 397,277 | 898.69% |
Taxation | (1,193,422) | 68,657 | – |
Profit after taxation for the year | 2,774,128 | 465,934 | 495.39% |
Earnings per share – basic and diluted (Rupees) | 6.38 | 1.07 | 496.26% |
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