Karachi: KTML has reported a significant growth in earnings per share (EPS) of 76% year-over-year (YoY) for fiscal year 2024, driven by revenue increases in its spinning, weaving, and home textile segments, as well as stronger cement operations. However, the company faced a decline in earnings during the first quarter of fiscal year 2025, with a 47% drop on a standalone basis and a 4% decline YoY on a consolidated basis.

According to JS Global, the reduction in earnings is attributed to competitive pressures in the spinning sector due to an influx of cheaper imported yarn, alongside an increase in the effective tax rate on textile operations to 39% from 20% a year earlier. Despite these challenges, KTML's spinning and weaving units are operating at above 90% capacity, while its processing unit is operating at around 50% capacity.

The management of KTML highlighted opportunities arising from the diversification of orders by importers in the United States and European Union away from China and Bangladesh, creating potential for Pakistani textile exporters to increase their market share. Additionally, the company is managing power costs through a combination of solar power, gas supplied by SNGPL, and furnace oil, resulting in a current cost of Rs27-28 per unit after net metering.

KTML's management also indicated that with the completion of major capital expenditure plans, the company might consider options for share buy-backs and cash payouts, though no dividends were announced despite significant earnings growth in the previous fiscal year. The company is awaiting further details on a power tariff subsidy announced for the winter months, which could potentially result in savings of Rs117 million to Rs120 million if applied to all incremental units consumed. However, the impact would be less significant if a consumption cap is implemented.