Nishat Mills’ profit falls 30% in 1HFY24 as rising costs bite
Nishat Mills Limited (NML), the flagship company of Nishat Group, saw its profit-after-tax plunge by 30%, clocking in at Rs5.96 billion for the half-year ended December 31, 2023.
The company registered a profit of Rs8.5 billion in the same period last year (SPLY), according to the notice sent to the Pakistan Stock Exchange (PSX) on Wednesday.
The drop in profit is attributed to rising cost of sales and finance during the period under review.
NML’s earnings per share (EPS) stood at Rs13.72 compared to Rs21.33 in SPLY.
The textile giant’s net sales increased by over 9% to Rs102.8 billion during 1HFY24, compared to Rs94 billion recorded in the prior year.
However, the company’s cost of sales stood at Rs86.2 billion in 1HFY24, an increase of 11%, as compared to Rs77.6 billion in SPLY.
As a result, NML’s gross profit stood at Rs16.69 billion in 1HFY24, showing a marginal increase of only 2%.
The textile firm’s gross margin declined to 16.2% in 1HFY24, as compared to 17.4% in 1HFY23.
During the period, the company operating expenses clocked in at Rs7.8 billion in 1HFY24, an increase of 8% on a yearly basis.
On the other hand, Nishat’s cost of finance rose to Rs5.3 billion in 1HFY24, as compared to Rs2.6 billion in SPLY, registering an increase of over 103%. The rise in cost of finance is attributed to an increase in the interest rate during the period.
The company’s profit after tax stood at Rs8.15 billion in 1HFY24, lower than Rs10.03 billion registered in SPLY.
Nishat Mills Limited was established in 1951. Being one of the largest vertically integrated companies in Pakistan, the company is engaged in spinning, weaving, printing, dyeing, bleaching, and stitching and apparel business.
NML deals in yarn, linen, and other products made from raw cotton and synthetic fiber. The company is also in the business of generating and supplying electricity.
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