Corporate results: Nishat Mills posts Rs1.9b profit

Result down 49.7%, EPS shrinks to Rs5.5 from Rs10.9.

KARACHI: Nishat Mills – owned by Mian Mansha, the only Forbes billionaire from Pakistan to date with over $1 billion net worth – has posted a net profit of Rs1.9 billion in the first six months (Jul-Dec) of fiscal year 2015 (FY15), down 49.7% compared to Rs3.9 billion in the same period of last fiscal year.

Earnings per share (EPS) shrank to Rs5.5 from Rs10.9 in the comparative period.

However, the company posted profits of Rs1.5 billion or an EPS of Rs4.4 during the second quarter of FY15, down 32% compared to Rs2.3 billion or an EPS of Rs6.5 in the second quarter of FY14 while up by 285% quarter-on-quarter.

Topline Securities on Tuesday said that the result was in line with its expectations.

The revenues of the company decreased by 4.9% to Rs26.7 billion in the first half of FY15 as compared to Rs28.1 billion in the same period last year mainly due to the appreciation of Pakistani rupee against the dollar.

Moreover, cost of sales increased by 3.7% to Rs23.7 billion as compared to Rs22.9 billion last year. The gross margins of the company, as a result, dropped by 735 basis points to 11.3% in the first half of FY15 compared to 18.6% in the corresponding period last year.

Other income of the company increased by 3.5% to Rs1.99 billion versus Rs1.93 billion in the same period last year mainly due to increased dividend from MCB Bank and DG Khan Cement (DGKC) – two sister concerns of the conglomerate owned by Mansha.

In second quarter of FY15, sales of the company declined by 4% to Rs13.9 billion versus Rs14.5 billion in second quarter of FY14 while it increased by 9% on quarter on quarter basis.

The cost of sales increased by 4.5% year on year and 8.1% quarter on quarter to Rs12.3 billion. As a result, the gross margins dropped by 720 basis points to 11.6% in second quarter of FY15, however, increased by 73 basis points compared to the first quarter of FY15.

Published in The Express Tribune, February 25^th,  2015.

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