NML - 2QFY24 Result Review Lower other income & topline kept earnings in check, (AKD Off the Analyst's Desk Feb 28, 2024)
NML - 2QFY24 Result Review Lower other income & topline kept earnings in check
Nishat Mills Limited (NML) announced its 2QFY24 result earlier today, wherein the entity reported unconsolidated earnings of PkR1.1bn (EPS: PkR3.1), lower by 76%QoQ compared to NPAT of PkR4.5bn (EPS: PkR12.9) in 1QFY24. This decline in earnings is primarily attributable to a quarterly drop in other income (due to the absence of dividends from power subsidiary/associates) and reduced sales.
- Topline clocked in at PkR36.9bn during 4QFY23, declining by 7.7%QoQ, possibly due to lower export volumes and PkR appreciation during the quarter (avg. rate PkR283/US$ from PkR292/US$ in 1QFY24).
- Gross margins contracted to 11.8% vs. 12.4% in preceding quarter, likely due to lower end prices and aforementioned currency appreciation.
- Distribution cost increased by 3.8%QoQ to PkR1.5bn, possibly due to higher inland fright following the implementation of axle load limits.
- Other income clocked in at PkR2.6bn vs. PkR5.6bn in the quarter before (↓53.4%QoQ), due to absence of dividend income from power subsidiary/associates (LPL, PKGP & NPL).
- Finance costs also rose by 13.7%QoQ to PkR2.7bn, likely due to an increase in ST-borrowings owing to high working capital requirement.
- Overall, for 1HFY24, earnings accumulates to PkR16.0/sh vs. PkR22.3/sh in the year before, with the decline largely attributed to contracted gross margins and higher financial charges.
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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