February 21, 2022 (MLN): Nishat Mills Limited (NML) has reported an unconsolidated profit after tax of Rs5.61 billion (EPS: Rs15.94), inflating by more than 3x YoY for the half-year ended on December 31, 2021, when compared to Rs1.77bn (EPS: Rs5.04) in 1HFY21.
The rise in earnings is attributed to improvements in yarn margins, the availability of low cotton prices along with the robust export order book where the country’s textile exports grew by 5%YoY in volumetric terms during 1HFY22 and hefty currency depreciation during the said period under review, AKD research report noted.
Going by the unconsolidated financial statement, the company’s top line registered a growth of around 60% to Rs53bn when compared to the same period last year due to volume increase resulting from gradual relaxation of the COVID-19 related restrictions and the holiday season in European countries. As a result, the gross margins clocked in at 15.8%, up by 4.4ppt during the said period.
On the costs front, NML’s total expenses swelled by 65% YoY mainly on the back of an 80% increase in the major expense head i.e., distribution and selling cost.
Notably, the other positive highlight is a more than 100% rise in other income to stand at Rs2.54bn, thanks to additional dividend income from NPL, LPL, PKGP, and NCL, strengthening its bottom line.
On the other hand, the company’s finance cost surged by 27.5% YoY on the back of rising short-term debt levels to bridge working capital requirements.
On the tax front, the effective tax rate improved to 12.6% in 1HFY22 from 19% in the same period last year (SPLY).
To note, NML’s consolidated net profits stood at Rs8.11bn (EPS: Rs20.75) during 1HFY22, up by 2.1x YoY.
|
Unconsolidated Profit and Loss Statement for the half-year ended December 31, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Dec-21 |
Dec-20 |
% Change |
|
Revenue |
52,891,961 |
33,135,777 |
59.62% |
|
Cost of Sales |
(44,536,314) |
(29,360,595) |
51.69% |
|
Gross Profit |
8,355,647 |
3,775,182 |
121.33% |
|
Distribution cost |
(2,562,626) |
(1,417,275) |
80.81% |
|
Administrative expenses |
(816,278) |
(651,825) |
25.23% |
|
Other expenses |
(331,045) |
(174,636) |
89.56% |
|
total expenses |
(3,709,949) |
(2,243,736) |
65.35% |
|
|
4,645,698 |
1,531,446 |
203.35% |
|
Other income |
2,544,171 |
1,270,114 |
100.31% |
|
Profit from operation |
7,189,869 |
2,801,560 |
156.64% |
|
Finance cost |
(776,502) |
(609,045) |
27.50% |
|
Profit before taxation |
6,413,367 |
2,192,515 |
192.51% |
|
Taxation |
(808,000) |
(419,000) |
92.84% |
|
Profit for the period |
5,605,367 |
1,773,515 |
216.06% |
|
Earnings per share – basic and diluted (Rupees) |
15.94 |
5.04 |
216.27% |
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