Pakistan Services Ltd's boosted finance cost weighs down annual profits
MG News | September 25, 2018 at 09:56 AM GMT+05:00
September 25, 2018 (MLN): Pakistan Services Limited (PSEL)’s annual consolidated profits for the year ended June 30th 2018 have declined by more than half due to higher administrative expenses and net finance cost.
PSEL conducted its Board of Directors meeting yesterday, where the board reviewed financial earnings for the year and issued a report of the same to PSX earlier this morning.
According to the report, on a year-on-year basis, PSEL witnessed almost 12% improvement in gross profits.
However, the company’s administrative expenses took a noticeable leap of 22%, from Rs.2.7 billion during the year ended June 30th 2017 to Rs.3.3 billion during the year ended June 30th 2018. This weighed down the operating profits of the company marginally.
Moreover, PSEL’s Finance income turned to financial losses this year while finance cost rose as well, pulling the net finance cost up drastically, by 193%.
Consequentially, the company’s overall profits for the year registered a 59% decline as it deteriorated from Rs.979.6 million to Rs.401.5 million, YoY.
In addition to this, the Company also informed that it has paid interim dividend at Rs.10 per share i.e. 100%.
| Consolidated Financial Results for the Year ended June 30th 2018 ('000 Rupees) | |||
|---|---|---|---|
|
| Jun-18 | Jun-17 | % Change |
| Revenue - net | 10,622,580 | 9,920,572 | 7.08% |
| Cost of sales and services | (5,739,399) | (5,555,823) | 3.30% |
| Gross profit | 4,883,181 | 4,364,749 | 11.88% |
| Other income | 153,974 | 141,164 | 9.07% |
| Administrative expenses | (3,276,907) | (2,684,839) | 22.05% |
| Other expenses | - | (40,509) |
|
| Operating profit | 1,760,248 | 1,780,565 | -1.14% |
| Finance income | (335,512) | 49,806 |
|
| Unrealized (loss)/gain on re-measurement of investment to fair value | (1,355) | 270 |
|
| Finance cost | (728,100) | (413,955) | 75.89% |
| Net finance cost | (1,064,967) | (363,879) | 192.67% |
| Share of profit in equity accounted investments - net | 90,552 | 100,499 | -9.90% |
| Profit before taxation | 785,833 | 1,517,185 | -48.20% |
| Income tax expense | (384,338) | (537,609) | -28.51% |
| Profit for the year | 401,495 | 979,576 | -59.01% |
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