Karachi, July 27, 2023 (PPI-OT): EFERT: Healthy margins hurt by high taxation
EFERT just announced their 2QCY23 results, posting a consolidated PAT of PkR1.1bn (EPS: PkR0.79/sh) vs. LAT of PkR0.1bn (LPS: PkR0.07/sh) in the SPLY. On a QoQ basis, the company posted a 24.1% drop in earnings, due to the impact of high taxation mainly on account of super tax. Total 1HCY23 EPS came in at PkR4.09/sh, almost flattish to PkR4.05/sh earned during 1HCY22. Further, the company has announced a PkR3.0/sh dividend payout, taking total 1HCY23 payout to PkR6.5/sh.
Revenues fell by 12.8%QoQ to PkR38.4bn vs PkR44.0bn in 1QCY23 but were up by a minor 0.1%YoY from PkR38.3bn in 2QCY22. 1HCY23 revenues came in at PkR82.4bn against PkR75.1bn in the SPLY, up by 9.6% depicting an uptick in sales due to higher prices, mainly for urea.
Gross margins clocked in healthier at 29.8% against 24.5% in 1QCY23 on account of increase in prices at the end of the last quarter. These are almost in line with the 30.5% margins achieved in 2QCY23.
Finance cost stood higher at PkR0.7bn vs. PkR0.4bn (1QCY23) and PkR0.6bn (2QCY22) mainly on account of high interest rates but the overall cost did not sky rocket mainly due to the company’s aim of reducing leverage. Other income during the period was lower by 37.7%QoQ and 24.0%YoY
Effective taxation came in at 85.1%, eroding the bottom line almost completely due to the impact of super tax. We expect this to burden the bottom line for the remaining half of the year.