September 16, 2020 (MNL): Millat Tractors Limited has disclosed the financial results for the year ended June 30, 2020, which show a Profit of Rs. 1.96 billion (EPS: 39.42), which is 44% lower as compared to the earnings of Rs. 3.5 billion (EPS: 70.55) recorded last year.
According to Darson Securities, this massive drop in earnings was a clear result of declining demand for tractors amidst poor agricultural dynamics as well as the overall economic situation in the country. This was quite apparent in the sales revenue figure, which declined by almost 25% as compared to the revenue of the last year.
While a fall of 24.6% in the cost of sales provided some respite, the gross profits still fell by 28% owing to the higher impact of declining sales.
The major highlight of the overall result was the 1.95x growth in finance costs, owing to the increasing need for short term loans by the company to meet its working capital requirement.
Other notable changes were the 68% decline in non-core income and 48% decline in other operating expenses. The major expense heads i.e. Distribution/Selling and Administrative expenses did not show any substantial changes.
The income tax expense stood at Rs. 946 million, i.e. almost 40% lower than the tax paid last year.
Consolidated Financial Results for the year ended June 30, 2020 (Rupees'000)
Revenue from contracts with customers
Cost of sales
Distribution and marketing expenses
Profit before taxation
Profit for the period
Earnings per share
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