Nishat Chunian Limited (NCL) has released its 1QFY24 results, reporting a profit after tax (PAT) of PkR 0.5 billion, equivalent to an earnings per share (EPS) of PkR 2.1. This represents a 13% quarter-on-quarter (QoQ) increase from the previous quarter’s profit of PkR 0.4 billion (EPS: PkR 1.9). The rise in profitability can be attributed to a significant growth in revenue, with gross margins remaining relatively steady at 13.7%, compared to 14.1% in the preceding quarter.

During the quarter, NCL achieved a top-line figure of PkR 24.2 billion, marking an 18% increase over the previous quarter and a substantial 59% increase year-on-year (YoY). This growth is likely a result of increased export sales, complemented by the depreciation of the Pakistani Rupee.

Gross margins, while showing minimal change, remained at 13.7% compared to the 14.1% recorded in the previous quarter. This stability is thought to be a result of higher fuel and energy costs being offset by lower cotton prices.

Distribution expenses increased by 13% QoQ, reaching PkR 482 million, possibly due to rising freight charges associated with increased fuel prices. In contrast, administrative expenses decreased by 29% QoQ, totaling PkR 106 million, down from PkR 149 million in 4QFY23.

The finance costs for the quarter amounted to PkR 2.0 billion, reflecting a 22% QoQ increase from PkR 1.6 billion in 4QFY23. This rise is likely attributable to increased short-term borrowings in response to liquidity constraints in the composites market, coupled with higher effective interest rates.

Net Sales24,22920,54918% 
Gross Profit3,3182,90714% 
Gross Margins13.7%14.1%  
Distribution Expenses48242513% 
Admin Expenses106149-29% 
Other Expenses47-310n.m 
Other Income131-172n.m 
Operating Profit2,8142,47114% 
Finance Costs1,9571,60622% 
Profit after Tax50744813% 
Earnings per Share2.11.9  
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