Ghandhara sees quarterly gains but half yearly profits shell of former self 

Ghandhara has seen quarterly profits rise by 23%, but half yearly profits still down 83%

LAHORE: The Ghandhara Tyre & Rubber Company released its earnings for Q2FY23 on February 23 on the Pakistan Stock Exchange (PSX). The company was able to record a quarter-on-quarter (QoQ) increase of Rs 4.1 million in its final earnings for a total quarterly earning of Rs 22 million. Their half yearly earnings clocked in at Rs 40 million for a year-on-year (YoY) decline of 84% from the Rs 241 million they recorded in HFY22.

Q2FY23 Earnings 

On a quarterly basis, Ghandhara saw a 24.19% increase in its sales revenue and a 30.49% increase in its cost of goods sold. This amounted to a final gross profit of Rs 538 million. This represents a 5.04% QoQ decline from the Rs 566 million the company saw in Q1FY23. Its gross profit, however, compares better on a YoY basis with the company recording a 12.79% increase over the Rs 503 million it recorded in Q2CY22. The company’s gross profit margin (GPM) of 13.55% fared similarly. It was lower than the 17.72% it recorded in Q1FY23, but higher than the 12.79% it recorded in Q2FY22.

Other notable changes include the 50.44% QoQ increase in the company’s other income. The company’s Rs 30 million, however, pales in comparison to the Rs 42 million it recorded last year over the same period. The company’s cost of finance also worsened by 5.25% QoQ, and by a whopping 92.11% YoY.  Its profit/loss from associated companies rose to Rs 373,000. This is a 116.62% QoQ improvement on the Rs 2.244 million loss it incurred previously. The profit, however, is a 82.62% YoY decline from the Rs 2.146 million in profit it recorded in Q2FY22. Looking at Ghandhara’s detailed quarterly report for Q1FY23, the earnings from associated companies is centred on the profit/loss it incurs through its share in Ghandhara Industries. 

Finally, the company ends the quarter with an effective tax rate (ETR) of 50.41%, and a total profit of Rs 22 million. The ETR represents a marginal QoQ increase from the 47.89% it recorded previously, whilst its profit represents a 22.86% increase on the Rs 17.98 million it saw previously. On a YoY basis, the ETR represents a significant increase on the 31.4% incurred in Q2FY22 whilst total earnings represent a 79.98% decline from the Rs 110.3 million earnt over the same period last year. 

HFY23 Earnings 

On a HFY basis, the company saw its HFY23 sales dip to Rs 7.1 billion. This represents a 12.23% YoY decline from the previous Rs 8.1 billion. Cost of goods sold, however, fell by 14.76% YoY from Rs 7.1 billion to Rs 6.06 billion. This in turn led to the  HFY23 gross profit to rise to Rs 1.1 billion, representing a 4.9% YoY increase. The GPM also rose from 12.89% to 15.41%. 

Profit from operations, similarly, rose to Rs 668 million representing a 1.4 YoY increase. The company’s finance cost, however, rose to Rs 587 million for a whopping 94.75% increase on the Rs 301 million it incurred in HFY22. Its earnings from Ghandhara Industries also recorded a 161.75% YoY decrease from the Rs 3.03 million it saw in HFY22.. The company’s ETR rose from 33.11% in HFY22 to 49.3% in HFY23. The company ended its half yearly report with a 83.39% YoY decline in its final earnings, as it recorded a measeley Rs 40 million in HFY23 against the Rs 241 million from HFY22

 

 

Daniyal Ahmad
Daniyal Ahmad
The author is a member of the staff, and covers the automobile, energy and advertising insdusties as a sector analyst. He can be reached at [email protected]

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