Slump in Ibrahim Fibres' non-core income weighs down annual profits

MG News | September 18, 2018 at 10:00 AM GMT+05:00

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September 18, 2018 (MLN): Ibrahim Fibres Limited’s bottom-line profit plunged by 75% on an annual basis, as a result of major declines in non-core income and tax provision this year.

The company conducted its Board of Directors meeting yesterday in which the financial earnings for the year ended June 30^th 2018 were evaluated and compared with the earnings made during the year ended June 30^th 2017.

Consistent with the contents of the report issued to PSX earlier today, The Company made annual net sales worth Rs.53.9 billion, up by 35% YoY, which led to an 85% increase in gross profits.

Although finance costs for the year dipped by 44%, the company’s overall expenses grew and in addition to this, their non-core/other income dropped by 99%, from Rs.5.9 billion to Rs.41.4 million. This resulted in a 55% drop in operating profits.

While on one hand the company’s share of profit from associates came down to nil this year, its tax reversals last year converted to tax provisions during the said period.

Consequentially, Ibrahim Fibres’ overall profits for the year dropped from Rs.8.5 billion to Rs.2.1 billion, YoY.

Furthermore, the company also recorded 75% dip in basic and diluted earnings per share, as they came down from Rs.27.31 per share to Rs.6.78 per share, YoY.

The board also recommended a final cash dividend of Rs.1.5 per share, i.e. 15%.

Financial Results for the Year Ended June 30th 2018 (Rupee)
	Jun-18	Jun-17	% Change
Sales - net	53,886,574,437	39,910,714,612	35.02%
Cost of goods sold	(49,390,634,390)	(37,485,488,926)	31.76%
Gross profit	4,495,940,047	2,425,225,686	85.38%
Selling and distribution expenses	(334,174,091)	(279,787,806)	19.44%
Administrative expenses	(717,047,912)	(701,464,610)	2.22%
Other operating expenses	(176,627,782)	(83,166,723)	112.38%
Finance cost	(386,786,162)	(693,390,377)	-44.22%
	(1,614,635,947)	(1,757,809,516)	-8.14%
Other income	41,440,917	5,875,838,361	-99.29%
	2,922,745,017	6,543,254,531	-55.33%
Share of profit from associate	-	1,281,164,000
Profit before taxation	2,922,745,017	7,824,418,531	-62.65%
Reversal of/(provision for) taxation	(816,055,169)	655,211,021
Profit for the year	2,106,689,848	8,479,629,552	-75.16%
Earnings per share - Basic and Diluted	6.78	27.31	-75.17%

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