MUGHAL_4QFY23 Result Review-Surprise dividend announced, (AKD Off the Analyst's Desk Sep 22, 2023)
Mughal Iron & Steel Industries Limited announced its 4QFY23 results, where the company posted an earnings of PkR834mn (EPS: PkR2.48), marking a 36% decrease compared to PkR1.31bn (EPS: PkR3.89) last quarter. This decline is majorly attributable to an increase in finance cost compared to last quarter, clocking in at PkR1.5bn (up by 49%QoQ). The company also announced a cash dividend of PKR3.2/sh whereas the dividend for FY22 was PkR3/sh.
- Topline for the quarter increased by 10%QoQ to PkR18.9bn, while reflecting an increase of 2%YoY. The said increase in sales is attributable to a resurgence in volumes.
- Gross margins fell to 16.2% vs. 18.9% during the quarter, amidst falling retail prices (PkR260k/ton during the quarter, down ~7%QoQ). Furthermore, economies of scale may have also played a hand amidst higher volumes compared to the quarter before.
- On the operating front, finance costs increased by 49%QoQ to PkR1.5bn introspecting a possible increase in short term borrowings combined with all-time high interest rates.
- Effective tax rate for the quarter was 39%, which indicates the retrospective implementation of super tax (ET: 32% for 3QFY23).
- The company adhered to its regular practice of paying out dividends during the year-end, distributing PkR3.2/sh in 4QFY23. This was surprising amidst falling earnings and retrospective charge imposition of super tax during the quarter
Mughal Iron & Steel Industries Ltd. Mughal Iron & Steel Industries Limited is engaged in manufacturing and trading of mild steel products. The Company is engaged in producing steel in the long-rolled steel products, which has a capacity of 688,000 metric/tons of re-rolled steel per annum. The Company is engaged in multidimensional activities from making billets of mild steel, spring steel, deformed bar, re-bar, cold twisted rebar and a range of sections, such as I-beams, L-sections, C-section, H-beams and T-bar. The Company offers its products under various categories, including Smelting, such as Ferro Silicomanganese, Ferro Chrome and Ferro Silicon; Billet, such as Mild Carbon Billets, Spring Steels, Austentic Stainless Steel, Ferrite Stainless steels and Alloys Steels; Bars, including Deformed Bars, Re-inforcement Bars and Thermax Bars; Beams, including I Beams (Girders), Angle Section (L Section), T Bar (T section) and C Channel, and Grade and Specifications, including ASTM A 615 G-40 and ASTM A 321.
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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