National Foods' bottom-line profits grow in the wake of tax reductions

MG News | September 07, 2018 at 09:46 AM GMT+05:00

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As per the financial earnings’ results for the year ended on June 30^th 2018, National Foods Limited gained 5.5% in annual profits, saved by substantial tax reduction.

The company conducted its Board of Directors meeting on September 6^th 2018 in which the earnings for the above mentioned period were reviewed and a year-on-year comparison was drawn.

According to the reports issued to PSX, the company’s sales went up by 28% during the year, whereas Gross Profits increased by 23%.

However, since all the expenses grew, including distribution cost which went up from Rs.3.5 billion to Rs.4.2 billion YoY, profits before taxation dropped by 11%.

Luckily for National Foods, net tax provisions were reduced by 57% this year, resulting in 5.5% increment in bottom-line profits as they increased from Rs.973.3 million during the year ended June 30^th 2017, to Rs.1 billion during the last year ended.

The company’s basic and diluted earnings per share increased from Rs.9.2 per share to Rs.9.74 per share, YoY.

Apart from this, the board recommended a final cash dividend at Rs.3.75 per share, i.e. 75%.

They further recommended to issue bonus shares in the proportion of one share for every five shares held i.e. 20%.

Consolidated Financial Results for the Year Ended 30th June 2018 ('000 Rupees)
	Jun-18	Jun-17	% Change
Sales	21,591,559	16,815,974	28.40%
Cost of sales	(14,887,820)	(11,383,196)	30.79%
Gross profit	6,703,739	5,432,778	23.39%
Distribution cost	(4,244,652)	(3,478,494)	22.03%
Administrative expenses	(913,220)	(520,221)	75.54%
Other expenses	(230,198)	(109,287)	110.64%
Other income	53,467	98,997	-45.99%
Operating profit	1,369,136	1,423,773	-3.84%
Finance costs	(195,728)	(104,817)	86.73%
Profit before taxation	1,173,408	1,318,956	-11.04%
Taxation - net	(146,374)	(345,666)	-57.65%
Profit after tax	1,027,034	973,290	5.52%
Basic and diluted earnings per share - Rupees	9.74	9.20	5.87%

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