February 17, 2022 (MLN): Mughal Iron & Steel Industries Limited (PSX: MUGHAL) has witnessed a sharp rise in net profits by 2.52x YoY during 1HFY22 to Rs3.53 billion with earnings per share EPS of Rs10.52, compared to Rs1.40bn (EPS: Rs4.55) in the corresponding period last year.
In conjunction with the financial statement, the board of directors has declared an interim cash dividend of 30% i.e., Rs3 per share for the year ending June 30, 2022.
The accretion in the company’s bottom line can be attributed to higher volumes due to strong demand from the private sector due to construction sector momentum, better rebar retention prices, and increased contribution of copper ingots export business.
During the period, the company’s net sales jumped significantly by 65% YoY largely due to increase in volumetric sales and higher retention prices to stand at Rs32bn. The gross margin of the company improved to 17.69% from 13.35% owing to a sizeable increase in copper ingot sales (ingots have higher margins than rebars) and an increase in international scrap-rebar spread.
With regards to the company’s major expense heads, the sales and marketing expenses climbed up by 46% YoY while administration expenses jumped by 43% YoY in line with inflation.
The major divergence was noticed in other charges head at Rs300 million, up by 2.48x YoY. The other income soared to Rs175mn, up by 158% YoY.
Furthermore, on the back of tight monetary policy, the finance cost of the company surged by 62.25% YoY.
On the taxation side, the company paid Rs469mn during 1HFY22, compared to Rs228.23mn in 1HFY21.
|
Profit and Loss Account for the half-year ended December 31, 2021 (Rupees) |
|||
|---|---|---|---|
|
|
Dec-21 |
Dec-20 |
% Change |
|
Sales |
32,081,987,688 |
19,445,579,378 |
64.98% |
|
Cost of sales |
(26,404,789,819) |
(16,848,004,438) |
56.72% |
|
Gross profit |
5,677,197,869 |
2,597,574,940 |
118.56% |
|
Sales and marketing expenses |
(98,766,630) |
(67,577,453) |
46.15% |
|
Administrative expenses |
(345,873,754) |
(241,745,579) |
43.07% |
|
Other charges |
(300,729,782) |
(121,180,601) |
148.17% |
|
Allowance for expected credit loss |
(118,991,893) |
– |
|
|
Other income |
175,160,468 |
67,901,022 |
157.96% |
|
Finance cost |
(987,051,726) |
(608,345,305) |
62.25% |
|
Profit before taxation |
4,000,944,552 |
1,626,627,024 |
145.97% |
|
Taxation |
(469,977,581) |
(228,233,851) |
105.92% |
|
Profit after taxation |
3,530,966,971 |
1,398,393,173 |
152.50% |
|
Basic and diluted earnings per share |
10.52 |
4.55 |
131.21% |
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