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

MG News | February 25, 2025 at 02:19 PM GMT+05:00

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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.

Consolidated Financial Results For The Half Year Ended December 31, 2024
	Dec-24	Dec-23	%Change
Gross Sales	53,518,356,954	52,410,920,736	2.11%
Sales Tax	(6,657,940,973)	(6,346,271,747)	4.91%
Net Sales Before Commission	46,860,416,726	46,064,648,989	1.73%
Commission	(34,999,255)	(15,095,955)	131.85%
Net Sales	46,825,416,726	46,049,553,034	1.68%
Cost of Sales	(42,626,295,612)	(41,025,371,632)	3.90%
Gross Profit	4,199,120,974	5,024,181,402	-16.42%
Sales and Marketing Expenses	(73,738,923)	(101,934,690)	-27.66%
Administrative Expenses	(448,076,042)	(405,435,928)	10.52%
Other Charges	(30,614,147)	(137,637,317)	-77.76%
Allowance for Expected Credit Losses (ECL)	30,881,743	21,930,334	40.82%
Other Income	78,563,935	106,773,675	-26.42%
Finance Cost	(3,398,275,219)	(2,951,139,181)	15.15%
Profit Before Levies and Taxation	(3,841,258,853)	(3,467,443,521)	10.78%
Levies	357,862,647	-400,267,989	-189.41%
Profit Before Taxation	537,098,237	1,156,469,982	-53.56%
Taxation	(351,059,493)	132,069,490	-365.81%
Profit for the Period	186,038,599	1,288,539,472	-85.56%
Share of Profit/(Loss) Attributable to:
- Equity Holders of the Holding Company	186,709,559	1,288,539,472	-85.51%
- Non-controlling Interest	(670,960)	0
Earnings Per Share - Basic & Diluted	0.56	3.84	-85.42%

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