Nishat Mills' profitability plunges by 4.6% YoY owing to weak core textile earnings

MG News | April 29, 2020 at 02:14 PM GMT+05:00

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April 29, 2020 (MLN): Nishat Mills Limited (NML) has unveiled its financial performance today for the nine months period ended on March 31, 2020, as per which the company observed 4.6% YoY deterioration net profits to Rs 6.79 billion from Rs 7.12 billion in the corresponding period of last year.

This reflected in the company’s earnings per share which plummeted by 13% YoY from Rs 16.18 to Rs 14.06.

The decline in company’s bottom-line during the period was attributable to weak core textile earnings on the back of muted growth in topline (4.25% YoY) amid significant Rupee depreciation which resulted in the rise in prices of final products. The gross margins of the company went up by 2ppts from 18% to 20%.

Additionally, the company also witnessed a substantial decline in profits from associates by 64.25% YoY and a decline in other income by 6% YoY on account of lower dividend income received from DGKC and NPL as well as lower exchange gains put an additional dent on NML’s profitability.

Financial Results for the Nine months ended Mach 31, 2020 ('000 Rupees)
	Mar-20	Mar-19	% change
Revenue	73,260,529	70,277,201	4.25%
Cost of Sales	(58,873,885)	(57,921,211)	1.64%
Gross Profit	14,386,644	12,355,990	16.43%
Distribution cost	(4,799,216)	(4,106,520)	16.87%
Administrative expenses	(1,561,259)	(1,341,032)	16.42%
Other expenses	(304,174)	(225,468)	34.91%
total expenses	(6,664,649)	(5,673,020)	17.48%
	7,721,995	6,682,970	15.55%
Other income	1,713,531	1,823,865	-6.05%
profit from operation	9,435,526	8,506,835	10.92%
Finance cost	(2,106,854)	(1,922,319)	9.60%
	7,328,672	6,584,516	11.30%
share of profit from associates	481,650	1,347,133	-64.25%
Profit before taxation	7,810,322	7,931,649	-1.53%
Taxation	(1,012,588)	(806,084)	25.62%
Profit for the period	6,797,734	7,125,565	-4.60%
Earnings per share - basic and diluted (Rupees)	14.06	16.18	-13.10%

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