October 20, 2020 (MLN): Packages Limited has reported earnings of Rs. 1 billion (EPS: 11.27) for the nine months ended September 30, 2020, i.e. 29% lower as compared to the same period of last year.
The decline in earnings was led by lower revenue earned during the period, as it fell by approximately 25%. Even though there was a decline of 27% in cost of sales, the gross profit still fell by 17%.
Other significant changes during the period under review include a 65% decline in non-core expenses and a 59% improvement in other income, both of which helped in boosting the earnings of the company.
Moreover, the finance costs fell by 12% while the income tax expense depicted a fall of 53%.
In 2019, the Board of Directors and Shareholders of Packages Limited approved the internal restructuring of the Company including transfer of its manufacturing businesses including folding cartons, flexible packaging, consumer products and mechanical fabrication & roll covers along with all relevant assets, operations and corresponding liabilities (Converting Business) to a newly formed wholly owned subsidiary i.e. Packages Convertors Limited.
On January 22, 2020, PCL received in-principle approval of SECP and the company transferred its Converting Business at carrying value of Rs 3,083 million as of July 1, 2020 upon completion of formalities. PCL has accordingly made regulatory reporting to SECP and shares will be issued to the Company upon SECP’s final approval for consideration otherwise than in cash i.e. Converting Business.
As a result, the operations of Converting Business have now become part of PCL effective July 11, 2020. The Converting Business has generated net sales of Rs. 6,026 million and profit after tax of Rs. 320 million during the quarter ended September 30, 2020.
|
Financial Results for the nine months ended September 30, 2020 (Rupees'000) |
|||
|---|---|---|---|
|
Sep-20 |
Sep-19 |
% Change |
|
|
Local sales |
15,316,906 |
20,347,827 |
-25% |
|
Export sales |
113,701 |
167,450 |
-32% |
|
Sales tax |
(2,365,394) |
(3,215,495) |
-26% |
|
Trade discount |
(257,622) |
(255,331) |
1% |
|
Net sales |
12,807,591 |
17,044,451 |
-24.9% |
|
Cost of sales |
(10,011,047) |
(13,648,795) |
-26.7% |
|
Gross profit |
2,796,544 |
3,395,656 |
-17.6% |
|
Marketing and distribution cost |
(747,740) |
(1,002,434) |
-25.4% |
|
Administrative expenses |
(714,695) |
(798,897) |
-10.5% |
|
Net reversal/(impairment) losses on financial assets |
(72,210) |
(50,059) |
44.2% |
|
Other expenses |
(245,278) |
(707,493) |
-65.3% |
|
Other income |
315,759 |
197,789 |
59.6% |
|
Finance cost |
(648,132) |
(741,326) |
-12.6% |
|
Investment income |
642,422 |
1,812,038 |
-64.5% |
|
Profit before taxation |
1,326,670 |
2,105,274 |
-37.0% |
|
Taxation |
(319,000) |
(686,000) |
-53.5% |
|
Profit after taxation |
1,007,670 |
1,419,274 |
-29.0% |
|
Profit per share |
11.27 |
15.88 |
-29.0% |
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