Lower investment income drives profit fall for Packages Limited

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MG News | August 27, 2018 at 03:49 PM GMT+05:00

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Packages Limited’s profits (unconsolidated) for the half year ended June 30, 2018 have dropped down by 33.3% as the company reported profits after tax of Rs 2.080 billion compared to Rs 3.120 billion reported a year ago for the half year ended June 2017.

Local Sales surged by about 18%, having been reported at Rs 12.3 billion, compared to Rs 10.4 billion a year ago. Export sales on the other hand, grew by 53% over the year.

Since cost of sales also surged by about 19%, the company’s gross profits rose by only 15%.

On the expenses front, the highest increase in expenses was reported for distribution and marketing expenses, which increased by 20.5% over the year. Both administrative and other operating expenses fell by 3.27% and 30.3% respectively.

Even though the company’s profit from operations increased by 54.39%, the significant drop of investment income from Rs 3.5 billion last year to Rs 2 billion this year caused the firm’s profit before taxation and after tax profits to fall by 32.14% and 33.31% respectively.

The company declared a basic EPS of Rs 22.36 this year, compared to Rs 34.41 last year. Moreover, the company also declared a diluted EPS of Rs 21.98 this year, about 32.6% less than the Rs 32.63 declared a year ago.

Profit and Loss Account for the Half Year Ended June 30th 2018 ('000 Rupees)
  Jun-18 Jun-17 % Change
Local Sales  12,304,684  10,415,989 18.13%
Export Sales  17,409  11,376 53.03%
   12,322,093  10,427,365 18.17%
Less: Sales tax  1,893,746  1,600,481 18.32%
Net Sales  10,428,347  8,826,884 18.14%
Cost of Sales  (8,347,980)  (7,017,868) 18.95%
Gross Profit  2,080,367  1,809,016 15.00%
Administrative expenses  (526,073)  (543,846) -3.27%
Distribution and marketing costs  (703,764)  (584,099) 20.49%
Other operating expenses  (185,742)  (266,479) -30.30%
Other income  139,245  106,186 31.13%
Profit from operations  804,033  520,778 54.39%
Finance costs  (201,184)  (226,462) -11.16%
Investment income  2,005,431  3,549,831 -43.51%
Profit before taxation  2,608,694  3,844,147 -32.14%
Taxation  (527,586)  (724,013) -27.13%
Profit for the period  2,080,694  3,120,134 -33.31%
Basic earnings per share (rupees) 22.36 34.41 -35.02%
Diluted earnings per share (rupees) 21.98 32.63 -32.64%

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