ILP_2QFY24 Result Review —Higher interest cost bites the earnings (AKD Off the Analyst's Desk Feb 20, 2024)
ILP_2QFY24 Result Review —Higher interest cost bites the earnings
Interloop Ltd. (ILP) announced its 2QFY24 financial result where the company posted unconsolidated earnings of PkR2.98bn (EPS: PkR2.1) vs. PkR6.04bn (EPS: PkR4.3) in the preceding quarter, down 51%QoQ. The result fell short of street consensus primarily due to a contraction in gross margins and higher-than-expected financial charges.
- Net sales clocked in at PkR35.3bn for 2QFY24 (↓8%QoQ/↑57%YoY). The said quarterly decline is possibly due to the flat volumes alongside rupee appreciation. To note, total textile exports as per PBS increased by 1%QoQ in 2QFY24, however, avg. prices dropped by 1% during the same period.
- Gross margins contracted to 27.6% compared to 33.1% in 1QFY24, possibly due to higher energy costs alongside a drop in end product prices, indicate increased production costs relative to sales prices during the quarter.
- Finance costs of the company increased to PkR2.6bn vs. PkR2.2bn in the previous quarter, up 18%QoQ, likely due to increased borrowings. To recall, company’s total debt rose to PkR64.6bn in Sept’23 accounts vs. PkR59.5bn at Jun’23 closing amid increased working capital requirement.
- Overall, this takes PAT for 1HFY24 to PkR9.03bn (PkR6.4/sh) against PkR4.58bn (PkR3.3/sh) in SPLY, up by 97%YoY. The said increase is mainly attributed to increased gross profits amid a 21% depreciation of the rupee during the period.
- Alongside the results, company announced a half-year dividend of PkR2.0/sh.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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