The second-largest tractor manufacturer in Pakistan, Al-Ghazi Tractors Limited (PSX: AGTL) has reported stellar annual results. For the year calendar ended 2016, the firms topline shows a 26 percent increment year-on-year, while gross profit grew by 34 percent. The bottomline growth was 21 percent over last year, and investors were rewarded with a Rs12.5 dividend.
Tractor sales picked up in the second half of the year, after the federal budget brought with it the reduction on tractor sales tax from 10 percent to 5 percent. The higher unit sales are evident in the countrys overall tractor sales, which have skyrocketed by 80 percent over last year, as per the latest numbers released by PAMA.
Apart from the reduced sales tax, the slight improvement in cotton and other crops along with the ongoing fertilizer subsidy have played their part in encouraging tractor sales during the period under review. Furthermore, unlike last year, there has been no tractor scheme imbroglio in FY17 to distort demand.
However, Al-Ghazis net margins took a hit over the period. This has been largely due to the decline in other income, which comes from income from investments in mutual funds and bank deposits.
Comments
Comments are closed for this article.