ISL posts highest quarterly sales at Rs12.6bn, up 32pc YoY

Earnings per share stood at Rs2.4, up 23 per cent YoY

LAHORE: International Steels (ISL +0.32 per cent) in a notification to Pakistan Stock Exchange (PSX) on Tuesday, released its financial results for the period ended March 31, 2018, announcing profit before tax during 3QFY18 at Rs1.5 billion, up by 7 per cent YoY basis.

ISL came out with a 10.65 per cent decline in earnings per share than the second quarter, however, was up 23 per cent YoY as per share earnings for the quarter stood at Rs 2.42 against Rs 1.97 in 3QFY17.

ISL surpassed its own sales record, posting highest ever quarterly sales revenue of Rs12.6 billion, up 32 per cent YoY while up 10 per cent QoQ. Meanwhile, this exponential growth can be attributed to an increase in both selling prices and volumes.

Price increases were in-line with average international flat steel prices (HRC/CRC) during the outgoing quarter, up on average by 15 per cent YoY while up 3 per cent QoQ.

Gross margins contracted by 224 bps to 15.8 per cent in 3QFY18 against 18.04 per cent last year. This was likely due to lower spread between Galvanize Product and HRC in the outgoing quarter, however, gross profits were up 16 per cent YoY while flat sequentially. Meanwhile, ISL’s earnings were dented by higher other operating expenses, up 139 per cent YoY.

Profit before tax during 3QFY18 rose 7 per cent YoY to Rs1.5 billion while net earnings grew by 23 per cent. This was on the back of lower effective tax rate, down 9 points to 29 per cent.

Nevertheless, despite promising growth analysts at Topline Securities in an investment note to investors flagged the downward revision in duty structure, volatility in commodity prices, dumping from countries not covered by anti-dumping duties, and delay in expansion commissioning, as key risks to the company and its future.

At the close of trading at PSX on Tuesday, ISL’s shares closed at Rs119.16 per share, up Rs0.38 or 0.32 per cent with a total of 1.41 million shares traded.

Eleazar Bhatti
Eleazar Bhatti
The writer currently serves as the Content Manager at Profit by Pakistan Today and is an economics graduate from Leeds Business School in the UK. He can be reached at [email protected] or at twitter.com/eleazarbhatti.

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