Kohinoor Textile post Rs7.83bn profit amid turnaround

April 22, 2021

560

Kohinoor Textile Mills Limited (LTML) marks a turnaround in its profitability as it posted net profits of PKR 7.83 billion during 9MFY21, as compared to net loss of PKR 1.98 billion witnessed in the same period last year.

Earnings per share stood at massive PKR19.88/share against Loss per share of PKR2.37 in last year.

KTML’s Sales revenues increased by 15.9% to PKR 47.6bn in 9MFY2021, while the cost of sales stagnant flat at PKR 37bn. This resulted in a gross profit of Rs10.7billion, marking 150% YoY increase.

The gross margin percentage improved to 23% from 10% in last year as a timely purchase of raw materials at competitive prices and the global shortage of imported fine-count yarns helped improve margins.

Furtermore, KTML has sufficient stock for rest of the year, hence margins are expected to be maintained at curent level for FY2021.

KTML is also planning capacity expansions in their spinning and weaving divisions. This is expected to increase operational efficiencies and gross margins of the company in long term.

On the expense side, the administrative cost and distribution cost incresed by 10.4% and 25.7% YoY respectively. However, the other income increased by 800%YoY to PKR 4bn during 9MFY21.

Moreover, a decline of 45.6% YoY in finance cost further provided much-needed respite to the bottom line due to lower short-term borrowings as well as the lower interest rates.

Rupees in ‘000	Mar-21	Mar-20
Revenue	47,668,710	41,114,732
Cost of sales	(36,937,592)	(36,843,032)
Gross profit	10,731,118	4,301,700
Distribution cost	(1,602,262)	(1,274,793)
Administrative expenses	(1,292,010)	(1,170,145)
Other expenses	(599,688)	(1,331,002)
Other income	4,094,103	460,566
Profit from operations	11,331,261	986,326
Finance cost	(1,592,767)	(2,926,483)
Profit before taxation	9,738,494	(1,940,157)
Taxation	(1,902,814)	(40,070)
Profit after taxation	7,835,680	(1,980,227)
Earnings per share	19.88	(2.37)