ISL_FY23 Result Review - Payout beyond expectations (AKD Off the Analyst's Desk Aug 22, 2023)
AKD, Off the Analyst's Desk
ISL_FY23 Result Review – Payout beyond expectations
International Steels Limited announced its 4QFY23 results, where the company posted an earnings of PkR1.94bn (EPS: PkR4.46), marking a 28% increase compared to PkR1.52bn (EPS: PkR3.48) last quarter. This growth is majorly attributed to sharp increase in margins compared to the quarter before, clocking in at 23.6% vs 13.3% during 3QFY23. Net Revenues during the quarter remained considerably low, amounting to PKR18.9bn (down 21%/9% QoQ/YoY). The company also announced a final dividend of PkR2.5/sh, in addition to a previously announced interim dividend of PkR3/sh, bringing the FY23 dividend to PkR5.5/sh.
- Topline for the quarter fell by 21%QoQ to PkR18.9bn, while reflecting a 9% decline YoY. The said decline is possibly due to decrease in volumes, taking into account contracted 2/3 wheeler sales and falling LSM (FY23: down 14.93%YoY).
- Although sales for 4QFY23 are diminished, the gross margins stand at 23.55% vs. 13.28% in the previous quarter reflecting a possible decline in manufacturing costs taking into account falling commodity prices.
- On the operating front, selling and distribution expenses rose by 96% to PkR 562mn and administrative expenses increased by 25%. Finance costs saw a significant decrease of 45%, taking it down to PkR217mn in 4QFY23 vs. PkR395mn in 3QFY23, introspecting a possible decline in short term borrowings.
- Taxes jumped by 95%QoQ to PkR1.2bn, attributable to the retrospective implementation of super tax (ET: 38% vs. 28% for 3QFY23).
- Dividend payout of PkR2.5/sh remained above expectations, possibly due to a surprise comeback from earnings when compared to last quarter.
AKD Research
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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