Nishat Chunian Limited (NCL) Q3 revenue rises by 23%

Insight Research has just released an update on recent quarterly results. Here are the important points from the quarterly earnings announcement:

Nishat Chunian Limited (NCL) has disclosed its 3QFY24 financial results, reporting an unconsolidated Profit After Tax (PAT) of PKR 381 million, equivalent to an Earnings Per Share (EPS) of PKR 1.59. This figure compares slightly lower to the same period last year when the company posted a PAT of PKR 388 million with an EPS of PKR 1.61.

Strong Revenue Growth

The company’s total revenue for the quarter saw a robust increase, reaching PKR 24.2 billion, which is approximately 39% higher compared to the same quarter last year and 20% higher sequentially. In US dollar terms, NCL’s revenue amounted to US$87 million for 3QFY24, up by 31% year-on-year (YoY) and 23% quarter-on-quarter (QoQ).

Improved Gross Margins

Gross margins for the quarter stood at around 12.2%, showing an improvement of about 2.5 percentage points YoY and 1.5 percentage points QoQ. This increase is possibly attributed to stronger spinning margins during the period.

Rising Operating Costs

Administrative and selling expenses totalled PKR 0.7 billion for the quarter, marking a substantial increase of 45% YoY and 12% QoQ. The cost escalation is likely due to inflationary pressures impacting the company’s operations.

Increased Finance Costs

NCL’s finance costs rose by approximately 23% YoY to PKR 1.8 billion in 3QFY24, primarily due to higher interest rates and an increase in short-term borrowings. However, on a QoQ basis, finance costs declined by about 17%, possibly reflecting a reduction in debt levels during the period.

Taxation Analysis

The effective tax rate for 3QFY24 was 39%, significantly higher than the 25% reported in the same period last year.

Key Takeaways

NCL’s quarterly performance demonstrated resilience amid challenging market conditions, with notable improvements in revenue and gross margins. However, the company experienced higher operating and finance costs, which impacted overall profitability.

NCL (PKRmn)	3QFY24	3QFY23	2QFY24	YoY	QoQ	9MFY24	9MFY23	YoY
Net Sales	24,228	17,408	20,107	39%	20%	68,565	47,080	46%
Cost of Sales	21,280	15,729	17,957	35%	19%	60,148	43,398	39%
Gross Profit	2,948	1,679	2,150	76%	37%	8,416	3,682	129%
Gross Margins	12.2%	9.6%	10.7%	–	–	12.3%	7.8%	–
Admin & Selling Exp.	745	515	667	45%	12%	2,001	1,542	30%
Other Expense	26	32	16	-20%	63%	88	390	-77%
Other Income	252	853	27	-70%	843%	410	1,110	-63%
Operating Profit	2,429	1,985	1,494	22%	63%	6,737	2,860	136%
Finance Costs	1,809	1,470	2,169	23%	-17%	5,936	3,813	56%
PBT/LBT	620	515	(676)	21%	N/A	801	(953)	N/A
Tax	239	127	236	88%	1%	825	495	67%
PAT/LAT	381	388	(911)	-2%	N/A	(23)	(1,448)	N/A
EPS / LPS	1.59	1.61	(3.80)	–	–	(0.10)	(6.03)	–

This table provides a clear comparison of NCL’s financial metrics across different periods, showcasing key changes in revenue, expenses, and profitability.

Disclaimer

The information in this article is based on research by Insight Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.