KARACHI: International Steels Limited (ISL) posted 17 per cent growth during 2nd quarter 2017-18 with earning per share (EPS) at Rs 2.7, in line with forecasts.
The result takes first half 2017-18 (EPS to Rs 5), up 88 per cent YoY. Along with the result ISL declared an interim cash dividend of Rs 1.5 per share.
ISL surpassed its own sales record, posting highest ever quarterly sales revenue of Rs 11.5 billion up 7 per cent QoQ, owing to an increase in selling prices while volumes remained stable.
Meanwhile, price increases were in-line with average international flat steel prices, which have similarly risen by 7 per cent QoQ during 2Q.
Gross margins increased to 17.5 per cent compared to 16.5 per cent last quarter and 20.5 per cent last year due to low-cost carryover inventory, analysts believe. Consequently, gross profits were up 13 per cent YoY and QoQ to Rs 2.0 billion, another quarterly milestone for the company.
Further, analysts opined that ISL will sustain its margins during 2nd half 2017-18, given expected price increases to pass on the impact of currency devaluation.
ISL’s costs remained in control, with SG&A remaining at 1 per cent of sales as compared to 2 per cent last year, while financial charges were stable.
Resultantly, profit before tax rose 15 per cent YoY to Rs 1.6 billion. Effective taxation of the company clocked in at 28 per cent compared to 58 per cent reported last year, resultantly tax charges fell 44 per cent YoY to Rs 465 million. The lower effective tax rate was the inherent profit driver, resulting in 98 per cent YoY growth in profitability to Rs 1.2 billion.
