KARACHI: Pak Elektron Limited, one of the leading home appliance makers in Pakistan, has posted a net profit of Rs1.62 billion in the quarter ended June 2017, down 6.3% compared with earnings of Rs1.73 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Thursday.
Earnings per share (EPS) came down to Rs3.24 in April-June 2017 compared with Rs3.46 in the corresponding period of last year.
A Topline Securities report said the result was below its expectations. The company also announced an interim cash dividend of Rs1.50 per share or 15% for the quarter.
The KSE 100-share Index closed at 45,634, down 364 points or 0.79% on Thursday. Pak Elektron’s share closed at Rs94.59, down 3.91% from its previous day’s closing price.
The report said the decline was due to higher discounts offered by the company in the appliances segment, mainly on refrigerators, which affected its margins.
Although gross revenues were up 14% year-on-year during the April-June quarter due to strong performance of the appliances segment, net revenues grew a mere 2% due to the discounts offered.
Consequently, the company took a hit on its margins, which shrank 183 basis points to 30%. The company had a robust performance in the first half (Jan-Jun) of 2017 as earnings grew 21% YoY, primarily due to 29% increase in gross sales. This excellent growth in revenues was attributed to robust sales of appliances.
Moreover, about 76% of the contribution to the gross revenues in the first half came from the company’s appliances division while the rest came from the power segment.
Published in The Express Tribune, August 11th, 2017.