April 26, 2021 (MLN): Packages Limited (PKGS) has revealed financial performance for three months ended on March 31, 2021, as per which the net loss of a company during 1QCY20 has been upturned to a net profit of Rs1.7billion
This translated into earnings per share which locked in at Rs18.39/sh as compared to a loss per share of Rs0.75 in the corresponding period last year.
The upturn in earnings was led by the higher revenues and income from associates.
In the half-yearly report, the Chairman of the company highlighted that PKGS is now operating as a holding company, and from July onwards, its performance would be determined by the financial performance of its subsidiaries, which in turn, would be influenced by the general economic environment.
During the quarter, the company’s net revenues went up by 19% YoY, while the cost of sales grew by a lesser proportion of 13.7% YoY. As a result, the gross margin improved to 22% from 18% in SPLY.
With regards to major expense heads, the company encountered a 6.5% YoY rise in its administrative expenses, while distribution and marketing expenses saw a marginal decline to Rs780mn.
Other significant changes during the period under review include a 95% decline in non-core expenses and a 2.1x improvement in other income, both of which helped in boosting the earnings of the company.
Moreover, the company also booked Rs21.1mn as investment accounted for using the equity method, compared to the loss of Rs76.5mn in 1QCY20.
Meanwhile, finance cost witnessed a drop by 37.78% YoY mainly due to the transfer of a major portion of finances under mark-up arrangements to Packages Converters Limited as a result of the demerger. Moreover, the low-interest rates and lesser short-term borrowings have also been the contributors behind the drop in finance cost.
On the tax front, the company incurred an effective tax rate of 24%, improved considerably by 100ppts from 125% in SPLY.
Alongside financial results, the Board of Directors of Packages Limited has approved the formation of a wholly-owned local subsidiary, which will be engaged in the business of manufacturing and distributing corn-based starch and its directive products. This will be beneficial for the shareholders of the Company in the long run.
|
Financial Results for the first quarter ended March 31, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
Mar-21 |
Mar-20 |
% Change |
|
|
Revenue from goods and services |
19,676,647 |
16,491,146 |
19.32% |
|
Cost of sales |
(15,421,447) |
(13,564,064) |
13.69% |
|
Gross profit |
4,255,200 |
2,927,082 |
45.37% |
|
Administrative expenses |
(649,046) |
(608,959) |
6.58% |
|
Distribution and marketing costs |
(780,848) |
(789,455) |
-1.09% |
|
Reversal of impairment losses /(net impairment losses) on financial assests |
1,828 |
(30,876) |
|
|
Other expenses |
(8,747) |
(183,168) |
-95.22% |
|
Other income |
85,939 |
39,568 |
117.19% |
|
Profit from operations |
2,904,326 |
1,354,192 |
114.47% |
|
Finance cost |
(645,050) |
(1,036,762) |
-37.78% |
|
Share of profit/(loss) of investment accounted for using equity method- net of tax |
21,080 |
(76,503) |
|
|
Profit before taxation |
2,280,356 |
240,927 |
846.49% |
|
Taxation |
(557,353) |
(300,482) |
85.49% |
|
Profit for the period |
1,723,003 |
(59,555) |
|
|
Basic earnings per share (Rupees) |
18.39 |
(0.75) |
|
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