Nishat Mills’ consolidated profit drops 14pc in 3QFY20

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LAHORE: The Board of Directors of Nishat Mills Limited (NML) met on Wednesday to review the company’s performance and announce its financial results for the quarter ended March 31, 2020.

As per the financials, the company posted a consolidated profit after tax (PAT) of Rs2.047 billion during the period under review, as compared to a PAT of Rs2.383 billion during the same period last year, showing a decrease of 14.09pc.

Meanwhile, NML’s unconsolidated PAT clocked in at Rs1.024 billion, as compared to a PAT of Rs973.129 million during the same period of 2019, depicting an increase of 5.23pc.

As per the company’s consolidated results, the company posted a 1.02pc drop in revenue (sales), from Rs23.583 billion to Rs23.341 billion.

However, as per its unconsolidated results, the textile manufacturer posted a 4.49pc increase in revenue, from Rs16.445 billion last year to Rs17.184 billion.

Umer Farooq, an investment analyst at AKD Securities Limited, said that NML’s net profit of Rs1,024million (EPS: Rs2.91), was 16pc ahead of market estimates.

He stated that the earnings beat came on the back of a higher than expected topline (we had assumed some hit from COVID-19 in the outgoing quarter) and higher than expected other income (probably on account of exchange gain).

Farooq said that the company’s revenue grew by a nominal 4pcYoY/1pcQoQ, signifying milder than expected hit from COVID-19 in the outgoing quarter.

He added that margin at gross level declined by 240bps YoY, albeit came ahead of estimates and improved 37bps QoQ.

He said that below the line expenses increased 19pcYoY/3pcQoQ though remained in line with the expectations.

The other income jumped 223pcYoY/14pcQoQ (25pc more than estimates), likely on account of exchange gain (Rupee depreciated 7pc between January to March this year).

Cumulatively, NML’s 9MFY20 earnings stood 30pc YoY lower on the back of: i) weak core textile performance (core EPS: Rs2.63 in 9MFY20 vs. Rs4.69 in 9MFY19) and ii) lower income (down 20pc YoY), which was due to lower payouts and higher exchange gains last year, he said.

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