Corporate results: Mughal steel’s profit increases 84%

Posts earnings of Rs721m for FY15, announces dividend, bonus shares

KARACHI:

Mughal Iron and Steel Industries posted net earnings of Rs721 million for the year that ended on June 30, 2015, up by a significant 84% compared to Rs391 million in the previous year.

Earnings per share (EPS) of the company jumped to Rs8.12 compared to an EPS of Rs4.76 in the previous year.

The company announced a final cash dividend for the year at Rs0.5 per share and 15% bonus shares.

Net sales of the company jumped sharply to Rs12.24 billion from Rs5.97 billion, showing a precipitous increase of 105%. The gross profit of the company also jumped quite sharply to Rs1.28 billion from Rs728 million, an increase of 76.6%.

“The international steel market is quite dull and Mughal Steel must have faced losses in old stocks,” Emerging Economics Research Managing Director Muzammil Aslam said. “However, growth in Pakistan’s construction sector is the primary reason behind the growth of the steel sector of the country.”

Until now the performance of Mughal steel is quite satisfactory. People are looking forward to the upcoming Initial Public Offer (IPO) of Amreli Steel because both Mughal and Amreli Steel compete in similar range of steel products, Aslam added.

Looking at the recent growth in the construction sector, steel industry officials are upbeat about steel consumption in the country, especially with the sustained increase in cement consumption and with major projects announced under China-Pakistan Economic Corridor.

Mughal Iron and Steel’s Initial Public Offering (IPO) was oversubscribed by over three times in the institutional phase of the offering in which investors put in bids worth Rs2.3 billion for the IPO at the high end of the pricing range at Rs34 per share in a matter of minutes.

Published in The Express Tribune, October 2^nd, 2015.

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