Revenue slump, cost hike hit Amreli Steels hard

February 27, 2024 (MLN): Amreli Steels Ltd. (PSX: ASTL) posted a wider loss in the first half of fiscal 2024 as revenue failed to lift off while expenses surged.

The steel manufacturer incurred a loss after tax of Rs605.17 million [LPS: Rs2.14] in the six months ended December 31, 2023, compared to a loss of Rs184.74m [LPS: Rs0.62] in the same period last year (SPLY).

Going by the results, the company's top line marked a decrease of 3.39% YoY to Rs22.25bn as compared to Rs23.03bn in SPLY.

However, the cost of sales also declined 4% YoY to Rs19.8bn, boosting gross profit by 1.7% YoY to Rs2.5bn. Gross margin improved to 11.2% from 10.6%.

Other income plunged 69% YoY to Rs2.11m in 1HFY24 as compared to Rs6.9m in SPLY.

On the expense side, administrative expenses jumped 32% YoY to Rs441.5m and other expenses soared 5.76x YoY to Rs122.9m.

Finance cost increased 15.5% YoY to Rs2.26bn as interest rates rose in the period.

On the tax front, the company paid a higher tax worth Rs290.09m against the Rs232.41m paid in the corresponding period of last year, depicting an increase of 24.82% YoY.

Amount in thousand except for EPS

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