Karachi: Nishat Chunian Limited (NCL) has announced its financial results for FY24, showcasing a significant turnaround from the previous fiscal year’s losses. The company reported an unconsolidated net profit after tax (NPAT) of PkR692 million, equivalent to earnings per share (EPS) of PkR2.9, a stark contrast to last year’s loss of PkR999 million or loss per share of PkR4.2.

According to AKD Securities Limited, the positive shift in NCL’s fortunes this year was primarily due to a tax reversal in the final quarter, alongside slightly higher-than-expected gross margins, countering the impact of lower gross margins throughout the year. In the fourth quarter of FY24 alone, NCL’s earnings were PkR705 million (EPS: PkR2.9), up from PkR448 million (EPS: PkR1.9) in the same period last year.

The company’s total revenue for the quarter slightly decreased by 1% year-over-year to PkR20.2 billion from PkR20.5 billion, impacted by lower international selling prices and a 3% appreciation of the Pakistani Rupee against the US dollar. Gross margins for the quarter contracted by 2.1 percentage points to 12.1%, affected by the same factors.

However, a notable tax reversal of PkR273 million helped mitigate the effects of elevated energy costs and lower selling prices on profitability. This adjustment significantly reduced the company’s full-year tax expense to PkR552 million, down 39% from PkR912 million in the previous fiscal year.

Despite the challenges, distribution expenses decreased slightly by 1% year-over-year, and administrative expenses increased by 22%, reflecting a mixed cost management scenario. Finance costs also rose by 13% to PkR1,818 million, reflecting the broader economic pressures on the company.

With these results, AKD Securities maintains a ‘Neutral’ stance on NCL, setting a target price for June 2025 at PkR27 per share. This outlook suggests a cautious optimism, acknowledging both the challenges and the strategic responses that have characterized NCL’s performance in a complex market environment.