Mughal Steel’s profits take a hit, down 86% YoY

February 25, 2025 (MLN): Mughal Iron and Steel Industries Limited (PSX: MUGHAL) has reported a profit of Rs186.04 million [EPS: Rs0.56] for the six-month period ended December 31, 2024, reflecting a sharp decline of 85.56% YoY compared to Rs1.29 billion [EPS: Rs3.84] in the same period last year (SPLY), as per the company's latest financial disclosure.

Despite a 2.11% YoY increase in gross sales to Rs53.52bn from Rs52.41bn in SPLY, the higher cost of sales, which rose by 3.90% YoY to Rs42.63bn, led to a 16.42% YoY contraction in gross profit, which stood at Rs4.2bn.

Sales and marketing expenses declined by 27.66% YoY to Rs73.74mn, while administrative expenses increased by 10.52% YoY to Rs448.08mn.

Other charges dropped significantly by 77.76% YoY, whereas the allowance for expected credit losses (ECL) also fell by 59.86% YoY to Rs30.88mn.

The company's other income declined by 68.16% YoY, reaching Rs3.4mn, while finance costs surged by 15.15% YoY to Rs3.4bn, primarily due to higher interest rates.

As a result, the company posted a pre-tax profit of Rs537.1mn, down 53.56% YoY from Rs1.16bn in SPLY.

Taxation expenses amounted to Rs351.06mn, reflecting a significant YoY increase, further impacting profitability.

The overall net profit for the period was Rs186.04mn, with earnings per share (EPS) falling to Rs0.56 from Rs3.84 in SPLY, representing an 85.42% decline.

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