Ghandhara Automobiles Limited (PSX: GAL) faced a significant drop in profitability during FY23, with its profit after tax amounting to PKR 173.53 million [EPS: PKR3.04], marking a 38.17% YoY decrease compared to the previous year’s profit of PKR280.67 million [EPS: PKR4.92].
The decline in profitability was primarily attributed to losses incurred from its associate, amounting to Rs38.21 million, in contrast to the profit of Rs263.4 million earned from the associate in the previous year.
Despite the decrease in profitability, GAL’s top-line revenue experienced substantial growth, surging by 2.05 times YoY to reach PKR13.1 billion, up from PKR6.38 billion in FY22. The cost of sales also increased proportionately but remained lower than the sales increase, resulting in a gross profit improvement of 2.02 times YoY to reach PKR1.13 billion in FY23.
Other income for the company expanded significantly by 93.97% YoY, reaching PKR267.73 million in FY23, compared to PKR138.03 million in the previous year.
On the expenditure side, GAL witnessed a 39.12% YoY increase in distribution costs and a substantial 379.88% YoY increase in other expenses, which amounted to Rs194.97 million and PKR103.71 million, respectively, during the review period.
The company’s finance costs also rose by 82.40% YoY, totaling PKR354.74 million, primarily due to higher interest rates. In terms of taxes, the company paid significantly more, with a tax expense of PKR216.25 million, compared to the PKR47.69 million paid in the corresponding period of the previous year, reflecting a 4.53 times YoY increase.
| FY2023 | FY2022 | % Change | |
| Sales | 13,104,563 | 6,381,609 | 105% |
| Cost of sales | -11,972,190 | -5,820,968 | 106% |
| Gross Profit | 1,132,373 | 560,641 | 102% |
| Distribution cost | -194,974 | -140,148 | 39% |
| Administrative expenses | -318,700 | -277,483 | 15% |
| Share of (loss) / profit of an Associate | -38,214 | 263,414 | -% |
| Other Income | 267,731 | 138,028 | 94% |
| Other expenses | -103,707 | -21,611 | 380% |
| Finance cost | -354,735 | -194,482 | 82% |
| Profit before taxation | 389,774 | 328,359 | 19% |
| Taxation | -216,247 | -47,692 | 353% |
| Net Profit | 173,527 | 280,667 | -38% |
| Earnings Per Share | 3.04 | 4.92 | – |
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