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.
| Unconsolidated (un-audited) Financial Results for the half year ended December 31, 2023 (Rupees in '000) | |||
|---|---|---|---|
| Dec 23 | Dec 22 | % Change | |
| Sales-net | 46,049,553 | 31,240,637 | 47.40% |
| Cost of sales | (41,025,372) | (27,878,955) | 47.16% |
| Gross Profit | 5,024,181 | 3,361,682 | 49.45% |
| Sales and marketing expenses | (101,935) | (83,367) | 22.27% |
| Administrative expenses | (405,436) | (312,138) | 29.89% |
| Allowance for expected credit losses – (charge)/ reversal | 21,930 | 48,042 | -54.35% |
| Other Income | 106,774 | 80,696 | 32.32% |
| Other expenses | (137,638) | (133,080) | 3.42% |
| Finance cost | (2,951,139) | (1,886,800) | 56.41% |
| Profit before taxation | 1,556,738 | 1,075,035 | 44.81% |
| Taxation | (268,198) | 267,533 | – |
| Net profit for the period | 1,288,539 | 1,342,568 | -4.02% |
| Basic earnings/ (loss) per share | 3.84 | 4 | – |
Amount in thousand except for EPS
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Posted on: 2024-02-27T13:40:10+05:00
