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THALL’s 1HFY24 profit soars with higher associate income, declares dividend

THALL's 1HFY24 profit soars with higher associate income
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February 27, 2024 (MLN): Thal Limited (PSX: THALL) recorded a massive jump of 3.07x YoY in its earnings in 1HFY24, clocking in its profit after tax at Rs5.4 billion [EPS: Rs61.73], compared to a profit of Rs1.76bn [EPS: Rs18.4] reported in the same period last year (SPLY).

Considering the company's achievement of profit growth, the directors of THALL have proposed an interim cash dividend for the half-year ended December 31, 2023, of Rs2 per share.

It is worth mentioning that THALL was able to achieve this remarkable financial performance despite a drop in sales, as its share of profit from associates was substantially boosted.

Going by the results, the company's top line decreased by 22.81% YoY to Rs11.85bn as compared to Rs15.36bn in SPLY.

The cost of sales also fell by 21.21% YoY but the drop was still lower than the decline in sales, which worsened the gross profit by 36.86% YoY to Rs987.39m in 1HFY24.

Accordingly, the company's gross margins during the review period worsened to 8.33% as compared to 10.18% in SPLY.

On the expense side, the company observed a decrease in Distribution and selling expenses by 17.75% YoY and other expenses by 93.87% YoY to clock in at Rs340.39m and Rs22.7m respectively during the review period.

On the other hand, THALL's administrative costs moved up 6.4% YoY to stand at Rs866.07m in 1HFY24.

The company's other income surged by 49.42% YoY to stand at Rs2.67bn in 1HFY24, contributing significantly to its profits this half.

As mentioned earlier, the main driving factor was the share of income from associates, which amounted to Rs5.18bn, compared to an inflow of Rs1.02bn in the SPLY.

The company’s finance cost soared by 2.31x YoY and stood at Rs532.6m as compared to Rs230.61m in SPLY, mainly due to higher interest rates.

On the tax front, the company paid a higher tax worth Rs1.69bn against the Rs787.69m paid in the corresponding period of last year, depicting a rise of 2.14x YoY.

Consolidated Financial Results for the half year ended December 31, 2023 (Rupees in '000)
  Dec 23 Dec 22 % Change
Sales-net 11,853,748 15,355,858 -22.81%
Cost of sales (10,866,357) (13,792,145) -21.21%
Gross Profit 987,391 1,563,713 -36.86%
Distribution and selling expenses (340,390) (413,825) -17.75%
Administrative expenses (866,065) (813,991) 6.40%
Share of net profit of associates – after tax 5,181,711 1,020,673 407.68%
Other Income 2,674,866 1,790,194 49.42%
Other expenses (22,695) (370,216) -93.87%
Finance cost (532,601) (230,608) 130.96%
Profit before taxation 7,082,217 2,545,940 178.18%
Taxation (1,685,472) (787,691) 113.98%
Net profit for the period 5,396,745 1,758,249 206.94%
Basic earnings/ (loss) per share  61.73 18.4  

Amount in thousand except for EPS

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Posted on: 2024-02-27T10:47:45+05:00