MUGHAL reports Rs1.29bn profit in 1HFY24, down 4% YoY

February 27, 2024 (MLN): Mughal Iron and Steel Industries Limited (PSX: MUGHAL) recorded a drop of 4.02% YoY in its earnings for 1HFY24, clocking in its profit after tax at Rs1.29 billion [EPS: Rs3.84], compared to a profit of Rs1.34bn [EPS: Rs4] in the same period last year (SPLY).

Going by the results, the company's top line rose by 47.4% YoY to Rs46.05bn as compared to Rs31.24bn in SPLY.

The cost of sales also increased by 47.16% YoY but the change was less than proportionate to the rise in sales which improved the gross profit by 49.45% YoY to Rs5.02bn in 1HFY24.

Accordingly, the gross margin of MUGHAL improved to 10.91% in 1HFY24 as compared to 10.76% in 1HFY23.

On the expense side, the company observed a rise in Sales and marketing expenses by 22.27% YoY and other expenses by 3.42% YoY to clock in at Rs101.93m and Rs137.64m respectively during the review period.

Likewise, the administrative expenses were also reported higher at Rs405.44m, marking a growth of 29.89% YoY.

The profit and loss statement further shows that other income of the company rose 32.32% YoY to stand at Rs106.77m in 1HFY24 as compared to Rs80.7m in SPLY.

The company’s finance cost rose by 56.41% YoY and stood at Rs2.95bn as compared to Rs1.89bn in SPLY, mainly due to higher interest rates.

On the tax front, MUGHAL incurred a tax expense of Rs268.2m in 1HFY24, against the tax credit of Rs267.53m received in 1HFY23.

Despite the rise in inflows through sales and other income, the company recorded a drop in profitability due to rising expenses, higher finance costs, and the burden of tax expenses during the review period.

Amount in thousand except for EPS

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