February 22, 2022 (MLN): Thal Limited (THALL) posted consolidated net profits of Rs3.17 billion (EPS: Rs36.10) during 1HFY22, up by 21.5% YoY when compared to the net profits of Rs2.61bn (EPS: Rs29.55) earned in the same period last year, mainly due to an increase in sales of the Engineering segment amid a surge in overall auto industry volumes.
The turnover of the company’s engineering segment showed a notable growth which was largely attributable to the improvement in automotive demand led by tax relief announced in the FY22 budget and pick up in overall economic activity post-Covid-19 lockdown.
Along with the results, the board of directors of the company proposed an interim cash dividend for the half-year ended December 31, 2021, at Rs5 per share i.e., 100%.
Going by the financial statement, the company’s top line witnessed a 48% YoY surge to stand at Rs18.4bn. However, the increase in the cost of sales by 50% shrank the gross margin by 1.4ppt to 16.5%
On the costs front, THALL’s total expenses swelled by 34% YoY mainly on the back of 37% and 17% increase in the major expense heads i.e., distribution costs and administrative expenses respectively.
Meanwhile, the finance cost of the company rose by 31% YoY to Rs113 million during the period under review as the central bank increased interest rates in the second quarter of the ongoing fiscal year on the back of growing inflation.
Notably, the positive highlight is a 51% jump in the income received from the share of profits of associates that stood at Rs1.2bn, strengthening the financial health of the company.
On the tax front, the effective tax rate stood at 25% in 1HFY22 as opposed to 23% in SPLY.
Consolidated Financial Results for the half-year ended December 31, 2021 ('000 Rupees) | |||
|---|---|---|---|
| Dec-21 | Dec-20 | % Change |
Revenue – net | 18,421,463 | 12,470,528 | 47.72% |
Cost of sales | (15,389,356) | (10,246,702) | 50.19% |
Gross profit | 3,032,107 | 2,223,826 | 36.35% |
Distribution costs | (354,971) | (258,386) | 37.38% |
Administrative expenses | (746,826) | (636,479) | 17.34% |
Other charges | (282,795) | (136,841) | 106.66% |
Other income | 1,471,610 | 1,463,640 | 0.54% |
Operating profit | 3,119,125 | 2,655,760 | 17.45% |
Finance costs | (113,171) | (86,321) | 31.10% |
Share of profit after tax of associates -after tax | 1,210,583 | 803,092 | 50.74% |
Profit before taxation | 4,216,537 | 3,372,531 | 25.03% |
Taxation | (1,048,679) | (765,346) | 37.02% |
Profit after taxation | 3,167,858 | 2,607,185 | 21.50% |
Basic and diluted earnings per share (Rupees) | 36.10 | 29.55 | 22.17% |
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