March 10, 2020 (MLN): The Philip Morris Pakistan Limited (PMPK) has posted net losses of Rs 1.979 billion for the year ended December 31, 2019, against the profits of Rs 543 million in 2018. The loss per share of the company reported at Rs 32.15 per share.
The losses were mainly attributable to the decline in net revenues by 17.69% YoY. Despite 10.13% YoY dropped in the company’s cost of sales, the gross profits of the company shrank by 30.45%, consequently, the gross margin declined to 31% from 37% in 2018.
As per the financial results announced, the Company recorded an Operating Loss before tax of Rs 2.44 billion compared to an Operating Profit before tax of Rs 640 million for the same period of 2018. The Operating loss before tax was mainly due to the management decision to reorganize its operational footprint by closing its factory in Kotri, which was essential to ensure long term sustainability of the business in Pakistan considering the unpredictable fiscal environment.
Moreover, excluding the one-off impairment and employee separation costs which were a result of the closure of the Kotri factory and GTL Voluntary Separation Scheme, t the Company would have recorded an Operating Profit before tax of Rs 357 million for the year 2019, instead of Operating loss before tax as mentioned above.
Financial Results for the Year ended December 31, 2019 ('000 Rupees) | |||
|---|---|---|---|
| Dec-19 | Dec-18 | % Change |
Turnover – net | 13,334,498 | 16,199,912 | -17.69% |
Cost of sales | 9,144,670 | 10,175,924 | -10.13% |
Gross profit | 4,189,828 | 6,023,988 | -30.45% |
Distribution and marketing expenses | 2,663,662 | 3,570,578 | -25.40% |
Administrative expenses | 1,512,611 | 1,389,471 | 8.86% |
Other expenses | 3,168,345 | 686,981 | 361.20% |
Other income | (710,607) | (263,044) | 170.15% |
Operating profit | (2,444,183) | 640,002 |
|
Finance cost and bank charges | 48,807 | 23,094 | 111.34% |
Profit before taxation | (2,492,990) | 616,908 |
|
Taxation | (512,991) | 73,757 |
|
Profit after taxation | (1,979,999) | 543,151 |
|
Earnings per share – basic and diluted (Rupees) | (32.15) | 1.68 |
|
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