International Steels’ profit plunges 39% to Rs2.66b
Board recommends 15% final dividend in addition to interim dividend already paid
A worker stacks steel pipes in a factory. PHOTO: REUTERS
KARACHI:
International Steels’ earnings dived 39% to Rs2.66 billion in the year ended June 30, 2019 on the back of a dip in gross margins.
The company had reported a profit of Rs4.36 billion in the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Monday.
The board of directors recommended payment of 15% final cash dividend ie Rs1.50 per share in addition to the 15% interim dividend already paid, taking total dividend to 30% - Rs3 per share - for the period under review. The company’s earnings per share stood at Rs6.12 for FY19 compared to Rs10.03 in the previous year.
Topline Securities’ analyst Hammad Akram was of the view that the significant decline in earnings was mainly due to decrease of 1.4 percentage points in gross margins of the company as the US dollar gained 31% against the rupee in FY19. Finance cost surged a massive 139.2% to Rs1.29 billion from Rs539.1 million in FY18 due to higher interest rates coupled with heavy borrowing. Net sales improved 15.6% on a year-on-year basis to Rs55.1 billion as the company sold around 140,000-145,000 tons of flat steel products, Akram said. On the other hand, other income took a hit, dropping 57.4% to Rs39.4 million in the period under review.
International Steels’ share price rose Rs1.13 or 3.55% to Rs32.94 with trading in 4.14 million shares at the PSX.
“Key risks for the company include dumping from countries not protected by anti-dumping duties, slowdown in the economy and further devaluation of the rupee,” the analyst added.
Published in The Express Tribune, August 20th, 2019.
International Steels’ earnings dived 39% to Rs2.66 billion in the year ended June 30, 2019 on the back of a dip in gross margins.
The company had reported a profit of Rs4.36 billion in the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Monday.
The board of directors recommended payment of 15% final cash dividend ie Rs1.50 per share in addition to the 15% interim dividend already paid, taking total dividend to 30% - Rs3 per share - for the period under review. The company’s earnings per share stood at Rs6.12 for FY19 compared to Rs10.03 in the previous year.
Topline Securities’ analyst Hammad Akram was of the view that the significant decline in earnings was mainly due to decrease of 1.4 percentage points in gross margins of the company as the US dollar gained 31% against the rupee in FY19. Finance cost surged a massive 139.2% to Rs1.29 billion from Rs539.1 million in FY18 due to higher interest rates coupled with heavy borrowing. Net sales improved 15.6% on a year-on-year basis to Rs55.1 billion as the company sold around 140,000-145,000 tons of flat steel products, Akram said. On the other hand, other income took a hit, dropping 57.4% to Rs39.4 million in the period under review.
International Steels’ share price rose Rs1.13 or 3.55% to Rs32.94 with trading in 4.14 million shares at the PSX.
“Key risks for the company include dumping from countries not protected by anti-dumping duties, slowdown in the economy and further devaluation of the rupee,” the analyst added.
Published in The Express Tribune, August 20th, 2019.