KARACHI: Amreli Steels Limited (ASTL) posted a net profit of Rs226 million in the quarter ended September 30, down by a significant 32% compared with Rs332 million in the same period last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share (EPS) decreased to Rs0.76 compared with an EPS of Rs1.49 in the period under review.
The results were below estimates, according to a Taurus Securities report.
The KSE-100 Index closed at 40,526, down 237 points or 0.58% on Wednesday. ASTL’s share closed at Rs65.97, down 4.39% from Rs69.
During the quarter, the steel mill’s revenue clocked in at Rs3.2 billion, down 6% year-on-year compared with Rs3.4 billion recorded in same period of last year. ASTL’s gross profits declined 29% year-on-year to Rs465 million compared with Rs654 million recorded last year with margins declining to 14.4% compared to 19.1% in the same period last year.
The company witnessed higher manufacturing cost, which is likely due to 7% year-on-year uptick in scrap prices, 1% higher customs duty on imported scrap and Rs1 per kWh increase in sales tax on electricity.
The bottom-line found some respite in the form of 32% year-on-year reduction in financial charges to Rs74 million due to deleveraging amid low interest rates and a miniscule tax reversal as the company likely availed tax credits.
Going forward, sales would rebound as the recent spike in coal prices filters through the steel chain, which would allow local manufacturers to raise domestic selling prices, along with 30% regulatory duty (RD) on imports.
Published in The Express Tribune, October 27th, 2016.
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