While the year 2020 brought slump for most of the businesses due to onslaught of COVID19, some businesses remained immune to the adverse impact. While very few businesses post growth during this tumultuous times.
Pak Elektron remained one of the few business houses which not only marked the revival of its operations but posted significant growth in Top and Bottom Line.
In a notice to Pakistan Stock Exchange, Pak Elektron announced its financial results for the year ending December-2020, where it posted net profit of PKR 223.8mn as compared to net profit of PKR 177 million in same period last year.
The company posted Yearly sales growth of 37% leading to total sales of PKR 37.988 billion. Pak Elektron was able to successfully raise retail prices of its product while raising volumetric sales.
Resultantly, Gross margins increased to 16.2% as compared to 12% last year. However, the sales growth came at a cost as the distribution expense of the company increased to 6% of the sales as compared to 3.4% in last year. As per market check, in order to penetrate the market in niches occupied by Haier and Orient, Pak Elektron has introduced heavy dealer commissions for placement and sales of its products. This led to a distribution expense of PKR 2.346 billion as compared to PKR 953 million last year.
PAEL’s finance cost increased by 42% YoY to PKR 2.198 billion due to increased reliance on short term borrowing. The increase n finance cost came despite Interest Rates coming down to 7%. Effective taxation ate revert back to 37% as the company pulled back the benefit of deferred taxation.
No dividend was announced with the financial results, primarily due to company’s constrained funding.
| Pak Elektron Financial Results for the Year 2020 |
(Rupees in ‘000)
|Cost of Sales||(22,397,517)||(19,021,046)||18%|
|Other Operating Expense||(51,283)||(43,205)||19%|
|Share of Profit/(Loss) from Associates||(2,203)||(2,806)||-21%|
|Profit Before Tax||355,940||211,336||68%|
|Profit After Tax||223,849||177,842||26%|
|Earnings Per Share||0.36||0.27||33%|
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