ZIL Limited’s net profit falls over 80% as costs rise

February 14, 2025 (MLN): ZIL Limited's (PSX: ZIL) net profit plummeted by 82.7% in the year ended December 31, 2024, as rising expenses weighed on profitability.

The company posted a profit after tax of Rs42.95 million [EPS: Rs7.01] during the period, compared to Rs247.97mn [EPS: Rs40.50] in the same period last year.

Despite a 12.2% increase in net sales to Rs6.36bn from Rs5.67bn in 2023, the rising cost of sales, which surged by 13.25% to Rs4.60bn, resulted in a lower gross profit margin.

Gross profit improved by 9.43% to Rs1.76bn, but operating profits saw a steep decline of 56.5% to Rs211.16mn due to a sharp 58.98% rise in selling and distribution expenses to Rs1.16bn and a 13.86% increase in administrative expenses to Rs394.88mn.

Other operating income slightly declined by 0.73% to Rs 19.29mn, while other operating expenses fell by 83.51% to Rs 10.62mn.

However, total other operating expenses increased by 37.92% to Rs 1.55bn.

Finance costs declined by 14.28% to Rs 118.96mn, providing some relief, but overall profitability was impacted by the additional levy of Rs 22.46mn.

Profit before taxation dropped significantly by 79.89% to Rs 69.74mn from Rs 346.78mn in 2023.

The taxation expense decreased by 72.89% to Rs 26.79mn, but it was not enough to offset the overall decline in net profit.

The company’s earnings per share fell sharply by 82.69% to Rs7.01 from Rs40.50 in the previous year, reflecting the challenging financial environment and increased cost pressures.

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