Nishat Mills’ net profits fall by 9% YoY in FY20 due to COVID-19 and lower other income

September 17, 2020 (MLN) : Nishat Mills Limited has posted a profit after tax of Rs 8.77 billion in FY20, depicting a decline of 9% YoY against a net profit of Rs 9.65 billion in FY19.

This has translated into earning per share which clocked in at Rs 18.07 against Rs 22.20 in the aforementioned period.

Other than this, the Board of Directors of NML announced a final cash dividend for the year ended June 30, 2020, of Rs 4 per share i.e. 40%.

During FY20, the company’s net profitability decreased on the back of lower revenue due to the outbreak of COVID-19, resulting in the closure of the plant to curb the spread of the virus and cancellation or delay in the sales order, highlighted by Arif Habib Limited’s research.

As per the financial statement issued by the company, the topline witnessed a drop of 7.6% to Rs 88 billion but more than a proportionate decrease in the cost of sales by 10.48% owing to a decline in raw material prices, led gross profits to increase by 6% YoY. Therefore, the gross margin jumped from 17.6% to 20.16%.

The other major highlight is other income which plunged by around 31% YoY to Rs 2.35 billion on the back of lower dividend income received from DGKC and NPL as well as lower exchange gains, the research said.

Meanwhile, the tax expenses plunged by 37% YoY to Rs 839 million compared to the same period of last year, providing the cushion to its earnings.

Copyright Mettis Link News