ISL's profitability drops considerably by 73% YoY

MG News | January 27, 2020 at 04:45 PM GMT+05:00

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January 27, 2020 (MLN): International Steels Limited has declared net earnings of Rs.465.9 million with an Earning per share of Rs. 1.07 for the half-year ended on December 31, 2019, i.e. nearly 73% lower than the earnings of the same period last year.

The decline in net profits is mainly attributable to the normalization of the tax rate and an increase in finance cost.

During the period, the topline of the company declined marginally by 1.62%YoY, on account of lower volumes. In addition, despite lower raw material prices, the gross margins declined 3 ppts to 9% from 12% on the back of PKR devaluation.

Moreover, the Company witnessed a massive rise in finance cost from Rs 591.8 million to Rs 1.34 billion mainly due to rise in running finance for higher working capital requirements and higher borrowing cost.

With regards to the company’s major expense head, admin expenses remained stagnant while distribution cost surged by 62%YoY.

Financial Results for the Half-year ended December 31, 2019 ('000 Rupees)
	Dec-19	Dec-18	% Change
Net Sales	25,364,552	25,783,410	-1.62%
Cost of Sales	(23,140,837)	(22,716,587)	1.87%
Gross profit	2,223,715	3,066,823	-27.49%
Selling and distribution expenses	(441,825)	(242,883)	81.91%
Administrative expenses	(134,732)	(135,185)	-0.34%
Finance costs	(1,345,963)	(591,843)	127.42%
Other operating charges	1,611	(164,433)	-100.98%
Other income	94,471	83,386	13.29%
Profit before taxation for the year	397,277	2,015,865	-80.29%
Taxation	68,657	(267,404)	-125.68%
Profit after taxation for the year	465,934	1,748,461	-73.35%
Earnings per share - basic and diluted (Rupees)	1.07	4.02	-73.38%

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