ICI’s profit grows 16 per cent

KARACHI: ICI Pakistan’s profit after tax grew 16 per cent to Rs397 million in the first quarter of 2010 as compared to Rs343 million in the same quarter of the previous year.

Earnings per share of the company were Rs2.86 during the period. The board of directors of ICI Pakistan Limited announced the first-quarter results for 2010 on Tuesday. First Capital Equities analyst Muhammad Rehan Khan said that the improved profitability of the company was mainly due to higher other income during the period. ICI posted Rs144 million in other income against Rs41 million in the first quarter of 2009. “This is a surge of 251 per cent, which remains the sole reason for the bottom-line growth,” Muhammad Rehan said.

Sales revenue of the company increased by 20 per cent to Rs8 billion against Rs6.7 billion in the corresponding period last year. Cost of sales rose 23 per cent at Rs6.9 billion during the quarter. A 15 per cent increase in operating expenses caused the operating level profitability to fall by 2 per cent to Rs555 million. “The operating profit was marred by the usage of expensive alternate energy sources necessitated by continued gas shortage in the country,” an analyst said.

Consequently, the growth in gross profit was restricted to only 7 per cent during the quarter. Financial charges during the period grew by 9 per cent to Rs37 million. Muhammad Rehan said “we maintain our ‘buy’ recommendation on the scrip with a target price of Rs180 per share”. The company did not announce any payout with the results.