KARACHI: Pak Elektron Limited, the maker of PEL appliances, recorded an 84% increase in net earnings during January-June 2015 over the same period last year, as it reaped the benefits of falling raw material prices and rise in demand of products like refrigerators.
Profit touched Rs2.13 billion against Rs1.2 billion in the comparable period of last year. The company also announced an interim cash dividend of Rs1.25 per share.
Besides homes appliances, which include refrigerators, air conditioners, deep freezers, microwave ovens and televisions, the company drives nearly half of its revenue from manufacturing power transformers, switchgears and other industry-use equipment.
While sales were up by a relatively modest 24%, the company maintained gross margin of 34%, indicating the continuous demand for electronic products. Financial cost was down 8.9% to Rs943 million, which analysts say was result of management’s attempt to restructure debt when interest rate came down. A heat wave that swept Karachi in June also increased sales of air conditioners and refrigerators.
PEL has seen a steady rise in its gross margins over the years as the company has solidified its position in the market for high-end equipment used by distribution companies and home appliances.
Published in The Express Tribune, September 1st, 2015.