PEL's annual profits decline by 36% YoY

By MG News | March 27, 2020 at 02:25 PM GMT+05:00

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March 27, 2020 (MLN): Pak Elektron Limited (PEL), which is currently operating in two main division; the Power Division and Appliances Division, has announced its financial results today for the year 2019, as per which the company’s net profits dipped by 36% YoY to Rs 878 million from Rs 1.3 billion earned in 2018.

The has reflected in the company’s earnings per share which exhibited a decline from Rs 2.67 per share to Rs 1.68 per share.

The decline in profitability was attributable to low volumetric sales, higher input cost coupled with lower pricing power during the year.

As a result, the company’s gross margins went down by 100 bps from 25% to 24%.

During the year, the rise in the average cost of borrowing in line with monetary tightening and surge in admin expenses by 14% YoY to Rs 1.23 billion further eroded company’s profitability.

However, the company enjoyed a reduction in tax payments by Rs 183.4 million, the impact is not enough to lift the company’s profitability up.

Alongside financial results, it is worthwhile to mention that the Board of Directors of the company in its recent meeting has approved the amalgamation of its subsidiary PEL Marketing (Private) Limited into PEL.

Consolidated Financial Results for the Year ended December 31^st, 2019 ('000 Rupees)
	Dec-19	Dec-18	% Change
GROSS SALES	37,621,269	38,990,247	-3.51%
SALES TAX AND DISCOUNTS	(9,721,351)	(10,544,936)	-7.81%
NET SALES	27,899,918	28,445,311	-1.92%
COST OF SALES	(21,326,893)	(21,448,040)	-0.56%
GROSS PROFIT	6,573,025	6,997,271	-6.06%
OTHER OPERATING INCOME	33,887	17,977	88.50%
DISTRIBUTION COST	(1,956,380)	(2,207,445)	-11.37%
ADMINISTRATIVE EXPENSES	(1,234,417)	(1,081,326)	14.16%
OTHER OPERATING EXPENSES	(52,217)	(63,376)	-17.61%
FINANCE COST	(2,480,088)	(2,103,343)	17.91%
SHARE OF PROFIT/(LOSS) OF ASSOCIATE	(2,806)	(2,456)	14.25%
PROFIT BEFORE TAXATION	881,004	1,557,302	-43.43%
PROVISION FOR TAXATION	(2,411)	(185,833)	-98.70%
PROFIT AFTER TAXATION	878,593	1,371,469	-35.94%
EARNINGS PER SHARE	1.68	2.67	-37.08%

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