Amreli Steels’ profit surges 48pc in FY2018

KARACHI: Amreli Steels Limited posted a 48 percent growth in profit at Rs1.6 billion for the year ended June 30, translating into earnings per share (EPS) of Rs5.34, a bourse filing said on Wednesday.

The rebar roller earned Rs1.1 billion with EPS of Rs3.62 during the preceding fiscal year, a statement to the Pakistan Stock Exchange said. It declared a cash dividend of Rs2.20/share.

Amreli Steels recorded 17 percent growth in revenue at Rs15.5 billion in FY2018.

Analyst Moazzam Akhtar at Taurus Securities Limited said sales revenue grew due to rise in average selling prices and higher production.

“Earnings witnessed a jump on the back of a 12 percent rise in gross profit and significant reduction in taxation despite a staggering 89 percent increase in finance costs and 19 percent rise in distribution and admin expenses.”

The steel mill availed tax credit in relation to its new Dhabeji plant.

Brokerage First Capital Equities said growth in earnings was due to a major tax reversal, “providing a boost to the bottom line of the company”.

“Net sales were up mainly on account of increase in retail construction and higher PSDP (public sector development program) expenditure by the government in elections year,” First Capital Equities added. Akhtar said the company’s gross margin declined 78 basis points mainly on account of rise in scrap costs.

“Further, production lagged behind expectations which we think would be due to new Dhabeji rolling plant operating at utilisation levels lower than that were envisaged for May/June 2018 and SITE rolling plant operating at lower capacity of 60 percent throughout the quarter (due to power shortages),” he added.