Millat Tractors suffers 40% decline in profits due to lower sales and higher expenses

MG News | February 14, 2019 at 01:02 PM GMT+05:00

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February 14, 2019 (MLN): Millat Tractors Limited (MTL) has announced its net income for the half year ended December 2018 at Rs.1.8 billion (EPS: Rs.41.11), a fall of over 40% from the net earnings of Rs.3 billion (EPS: Rs.69.10) recorded for the same period last year.

The company’s topline (Rs.15.4 billion) toppled over by more than Rs.3.3 billion (or 17.5% YoY), consequently weighing down the gross profits (Rs.3.5 billion) by nearly 33% as although the cost of sales did reduce its decline was insufficient to cover for the lost sales.

The negative impact gathered more weight as the overall expenses marked a rise of Rs.106.4 million and finance cost (Rs.47.6 million) grew by Rs.39 million over the year.

While decrease in tax payments worth Rs.565.9 million provided some relief to the company, it was not enough to prevent a fall in profits.

Apart from this, the Board of MTL has recommended an Interim Cash Dividend at Rs.45 per share, i.e. 45%.

Consolidated profit and loss account for the half year ended Dec 31st 2018 ('000 Rupees)
	Dec-18	Dec-17	% Change
Sales- net	15,399,093	18,666,490	-17.50%
Cost of sales	11,912,414	13,473,401	-11.59%
Gross profit	3,486,679	5,193,089	-32.86%
Distribution and marketing expenses	345,339	348,636	-0.95%
Administrative expenses	401,662	364,105	10.31%
Other operating expenses	427,335	355,167	20.32%
	1,174,336	1,067,908	9.97%
Other income	366,595	320,210	14.49%
Operating profit	2,678,938	4,445,391	-39.74%
Finance costs	47,657	8,600	454.15%
Profit before tax	2,631,281	4,436,791	-40.69%
Taxation	810,307	1,376,173	-41.12%
Profit for the year	1,820,974	3,060,618	-40.50%
Basic and diluted earnings per share (Rupees)	41.11	69.10	-40.51%

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