JS Co.'s net earnings decline by 53% on account of Rs7 bln increase in finance costs

MG News | March 20, 2019 at 03:02 PM GMT+05:00

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March 20, 2019 (MLN): Jahangir Siddiqui and Co. Limited has reported annual profits of Rs. 814 million (EPS: 0.7) for the year ended December 31, 2018, i.e. 53.45% lower than the profits of last year. The decline in net earnings was a result of a larger increase in company’s total expenses (35.75%) as compared to total income (26.88%).

The finance costs in particular caused most of the damage as they proliferated by 50%, i.e. around Rs. 7 billion. This was followed by administrative and other expenses which grew by 22%, i.e. Rs. 2 billion.

However, the company gained some respite from decline in taxation expense by 37.3%. One of the reasons for this decline was presence of deferred tax of around Rs. 90 million.

Profit and loss account for the year ended December 31 2018 (Rupees'000)
	Dec-18	Dec-17	% Change
Income
Return on investments	11,263,071	11,400,117	-1.20%
(Loss) / gain on sale of investments - net	-1,136,320	1,796,423
Income from long term loans and fund placements	19,940,898	10,267,506	94.21%
Fee, commission and brokerage	3,322,029	2,845,878	16.73%
(Loss) / gain on remeasurement of investments through profit or loss - held for trading - net	-72,246	18,130
Other income	944,360	675,498	39.80%
	34,261,792	27,003,552	26.88%
Expenditure
Administrative and other expenses	11,757,180	9,649,647	21.84%
Finance cost	21,362,121	14,198,100	50.46%
Workers' Welfare Fund	-153,421	51,438
(Reversal of) / provision for impairment on investments - net	-220,511	223,031
	32,745,369	24,122,216	35.75%
Share of profit from associate	6,674
Profit before taxation	1,523,097	2,881,336	-47.14%
Taxation
- Current	771,795	900,033	-14.25%
- Prior	26,945	196,063	-86.26%
- Deferred	-90,440	34,766
	708,300	1,130,862	-37.37%
Profit for the year	814,797	1,750,474	-53.45%
Earnings per share-Basic and diluted	0.70	1.53	-54.25%

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