April 27, 2020 (MLN): Millat Tractors Limited (MTL) has announced its financial results for the 9MFY20 as per which company’s net profits has declined by around 55% YoY to clock in at Rs 1.20 billion (EPS: Rs 24.13) against the net profits of Rs 2.66 billion (EPS: Rs 53.40) of the corresponding period last fiscal year.
According to a research note by Arif Habib Limited, the decline in profitability is attributable to the contraction in sales volume on the back of lower yields of farmers on agriculture products, resulting in lower demand for tractors.
As per the financial statement issued by the company to PSX, the company’s gross profits plunged by 37.4% YoY due to a drop in sales revenue despite a 26% decline in the cost of sales, shrinking gross margins from 22% to 19%.
On the expense front, the distribution and marketing expenses of the company remained flat while the other operating charges dropped by 70% YoY to Rs 159 million.
On the other hand, other income of the company plummeted by 71% YoY to Rs 116 million.
Meanwhile, the finance cost soared by 3.5 times YoY, from Rs 89 million to Rs 316 billion due to a substantial increase in short term borrowing while the tax expenses of the company fell by 51% YoY, providing the cushion to its earnings.
|
Consolidated profit and loss account for the nine months ended March 31st, 2020 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Mar-20 |
Mar-19 |
% Change |
|
Sales- net |
16,852,721 |
23,567,834 |
-28.49% |
|
Cost of sales |
13,641,269 |
18,439,011 |
-26.02% |
|
Gross profit |
3,211,452 |
5,128,823 |
-37.38% |
|
Distribution and marketing expenses |
530,508 |
537,257 |
-1.26% |
|
Administrative expenses |
566,520 |
581,000 |
-2.49% |
|
Other operating expenses |
159,784 |
530,089 |
-69.86% |
|
|
1,256,812 |
1,648,346 |
-23.75% |
|
Other income |
116,107 |
398,680 |
-70.88% |
|
Operating profit |
2,070,747 |
3,879,157 |
-46.62% |
|
Finance costs |
316,386 |
89,234 |
254.56% |
|
Profit before tax |
1,754,361 |
3,789,923 |
-53.71% |
|
Taxation |
552,085 |
1,129,108 |
-51.10% |
|
Profit for the year |
1,202,276 |
2,660,815 |
-54.82% |
|
Basic and diluted earnings per share (Rupees) |
24.13 |
53.40 |
-54.81% |
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