TOWL couldn't soak up losses as profits slashed by two-thirds

February 25, 2025 (MLN): Towellers Limited (PSX: TOWL) has reported a sharp decline in its profitability for the half-year ended December 31, 2024. The company’s profit for the period stood at Rs201 million, marking a significant 66% drop compared to Rs605mn in the same period last year.

The earnings per share (EPS) also saw a substantial reduction, falling from Rs35.58 to Rs11.85.

Despite a modest 3% increase in net sales, reaching Rs7 billion from Rs6bn in 2023, the company faced rising cost pressures.

The cost of sales rose by 7% to Rs6.2bn, which led to a 24.4% decrease in gross profit, bringing it down to Rs693.5mn from Rs917.4mn in the previous year.

Higher operational expenses further strained the company’s performance. Distribution costs surged by 59% to Rs267.5mn, while administrative expenses increased by 18.8% to Rs218.4mn.

Other operating expenses declined by 40.7% to Rs27mn, but this was offset by a sharp 60.6% fall in other income, which stood at Rs94mn compared to Rs239mn last year.

The company’s profit from operations plunged by 63.8% to Rs274.7mn from Rs759mn.

 Additionally, finance costs nearly doubled, reaching Rs17.2mn from Rs8.6mn.

Consequently, profit before levies and income tax declined by 65.7% to Rs257.5mn, while levies were significantly reduced by 71.7% to Rs29mn.

After accounting for income tax expenses of Rs26.8mn, Towellers Limited recorded a net profit of Rs201.5mn.