Nishat Chunian profit grows 46% in FY18

It is due to higher sales of spinning segment, rupee depreciation, rise in yarn prices

KARACHI: Nishat Chunian Limited’s annual profit grew 46% to Rs2.3 billion in financial year 2017-18 compared to Rs1.6 billion in the previous year.

The company’s earnings per share (EPS) stood at Rs9.84 for the year, which had been Rs6.75 last year. It also announced a cash dividend of Rs4 per share.

The company recorded net sales of Rs35.5 billion during the year, showing a 19% growth as compared to Rs29.8 billion in financial year 2017.

“This is due to higher sales of the spinning segment, rupee depreciation and increase in cotton yarn prices,” said AHL Research analyst Arsalan Hanif. “Despite lower payout from subsidiary NCPL, other income of the company increased 1% to Rs1.1 billion possibly due to the gain on sale of investment company Nishat Chunian Entertainment,” he added. Finance cost rose 26% to Rs1.4 billion due to increase in borrowing to meet the working capital and capital expenditure requirement. Gross margins of the company improved by 229 basis points to 12.01% in financial year 2018 as compared to last year’s 9.73%.



According to Hanif, it was due to rebates available on exports - 4% on yarn, 5% on weaving, 6% on home textile and 7% on readymade garments. Purchase of cotton at cheaper rates may also have resulted in inventory gains.



Meanwhile, on a quarterly basis, earnings of the company showed a massive growth of 425% to Rs1.16 billion in the fourth quarter of FY18 as compared to the Rs221 million the company earned in the fourth quarter of FY17. Nishat Chunian’s share price closed at Rs52.28, up 0.69% or Rs0.36, with 3.13 million shares changing hands at the PSX.

Published in The Express Tribune, October 3^rd, 2018.

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