Nishat Mills reports a 26% YoY decline in first-quarter profit

MG News | October 28, 2020 at 02:43 PM GMT+05:00

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October 28, 2020 (MLN): Nishat Mills Limited (NML) has declared its financial results today for the quarter ended September 30^th, 2020, according to which it has posted its net profits of Rs 1.69 billion (EPS: Rs 3.52), down by 26.40% YoY compared to the same period last year net profit of Rs 2.29 billion (EPS: Rs 4.67).

According to the research note by AKD, the decline in earnings is primarily attributable to a 70% YoY decline in other income, which is due to the absence of dividend income from MCB following the SBP's moratorium on payouts. (MCB contributed PKR1.0 per share to NML’s pre-tax earnings in 1QFY20).

During the period, the top-line earnings of the company increased marginally by 0.30% YoY while the cost of sales rose by 6% YoY. Accordingly, gross margin shrank from 20% to 16% during the said period which was partially offset by lower other expenses (down by 65.6% YoY).

However, a 28% decline in finance cost to Rs 485 million along with the share of profit from the associates of Rs 355 million provided much-needed respite to the bottom line.

Consolidated Profit and Loss Statement for the quarter ended September 30th, 2020 ('000 Rupees)
	Sep-20	Sep-19	% Change
Revenue	25,554,947	25,477,386	0.30%
Cost of Sales	(21,546,236)	(20,316,100)	6.05%
Gross Profit	4,008,711	5,161,286	-22.33%
Distribution cost	(1,446,472)	(1,548,121)	-6.57%
Administrative expenses	(522,771)	(502,624)	4.01%
Other expenses	(81,764)	(237,655)	-65.60%
total expenses	(2,051,007)	(2,288,400)	-10.37%
	1,957,704	2,872,886	-31.86%
Other income	157,398	521,367	-69.81%
profit from operation	2,115,102	3,394,253	-37.69%
Finance cost	(485,466)	(673,640)	-27.93%
	1,629,636	2,720,613	-40.10%
share of profit/(Loss) from associates	355,902	(118,447)
Profit before taxation	1,985,538	2,602,166	-23.70%
Taxation	(294,467)	(304,526)	-3.30%
Profit for the period	1,691,071	2,297,640	-26.40%
Earnings per share - basic and diluted (Rupees)	3.52	4.67	-24.63%

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