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Revenue slump, cost hike hit Amreli Steels hard

Revenue slump
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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.

Unconsolidated (un-audited) Financial Results for half year ended December 31, 2023 (Rupees in '000)
  Dec 23 Dec 22 % Change
Sales 22,251,024 23,030,883 -3.39%
Cost of sales (19,767,428) (20,588,408) -3.99%
Gross Profit 2,483,596 2,442,475 1.68%
Administrative Expenses (441,460) (334,626) 31.93%
Selling And Distribution Expenses (553,444) (499,045) 10.90%
Other Income 2,113 6,898 -69.37%
Other Operating Expenses (122,942) (21,348) 475.89%
Finance Cost (2,263,129) (1,958,972) 15.53%
Loss before taxation (895,266) (417,158) 114.61%
Taxation 290,094 232,414 24.82%
Net Loss for the period (605,172) (184,744) 227.57%
Basic earnings/ (loss) per share (2.14) (0.62)

Amount in thousand except for EPS

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Posted on: 2024-02-27T15:40:52+05:00