Karachi: Interloop Ltd. (ILP), a major player in the textile industry, reported a significant decline in its annual earnings for the fiscal year 2024, with profits falling by 22% year-over-year amid shrinking gross margins and rising operational costs.
According to AKD Securities Limited, ILP’s earnings for FY24 stood at PKR 15.8 billion, a decrease from PKR 20.2 billion in the previous year, primarily due to a contraction in gross margins from 33.3% to 22.4% and an increase in finance costs. The company’s financial struggles were particularly evident in the fourth quarter, where earnings plummeted by 56% year-over-year to PKR 2.6 billion, significantly below expectations.
The revenue for ILP saw a 23% increase in the fourth quarter, reaching PKR 43.3 billion, driven largely by a boost in exports, which constitute 90-95% of the company’s sales. Despite the revenue increase, profit margins were heavily impacted by a decrease in export prices and escalating costs for cotton and energy.
Distribution expenses also rose sharply by 59% year-over-year, aligning with the higher volume of exports, while finance costs surged by 74% due to an additional PKR 6.0 billion in borrowings during the period. The company announced a final dividend of PKR 2.5 per share, which contributed to a total annual payout of PKR 4.5 per share, reflecting a payout ratio of 40%.