SEARL revenue declines as stock price crashes

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

Overview of Quarterly Performance

In the third quarter of the fiscal year 2024 (3QFY24), SEARL reported a Loss Per Share (LPS) of PKR 1.34, with a Loss After Tax (LAT) of approximately PKR 605 million. This marks a significant decline of 3.6 times compared to the same period last year.

Revenue Analysis

During 3QFY24, SEARL’s total revenue stood at around PKR 8.8 billion, reflecting a year-on-year decline of 8% and a quarter-on-quarter decline of 5%. The gross margin also decreased by 3 percentage points compared to the previous year.

Factors Impacting Earnings

The decline in revenue was attributed to increased administration costs and distribution costs on an annual basis. These factors, combined with higher turnover tax, resulted in the reported Loss After Tax (LAT) for the quarter.

Nine-Month Performance

Looking at the cumulative nine-month period of FY24 (9MFY24), SEARL’s sales reached approximately PKR 28.9 billion, representing a 9% year-on-year increase. However, earnings were negatively affected by elevated distribution costs (up 18% YoY), administration costs (up 33% YoY), and finance costs (up 16% YoY).

Financial Metrics

Summary table showcasing key financial metrics for SEARL’s 3QFY24:

Metric	3QFY24A (PKR Mn)	3QFY23A (PKR Mn)	YoY Change	2QFY24A (PKR Mn)	QoQ Change	9MFY24A (PKR Mn)	9MFY23A (PKR Mn)	YoY Change
Net Sales	8,768	9,569	-8%	9,223	-5%	28,854	26,425	9%
Cost of Sales	5,573	5,825	-4%	5,650	-1%	17,934	15,579	15%
Gross Profit	3,195	3,745	-15%	3,573	-11%	10,920	10,846	1%
Distribution Costs	2,184	2,020	8%	2,260	-3%	6,590	5,594	18%
Administrative Expenses	583	400	46%	485	20%	1,489	1,123	33%
Other Expenses/(Income)	(76)	99	-1.8x	107	-1.7x	(172)	127	-2.4x
Profit from Operations	504	1,424	-65%	935	-46%	3,012	4,256	-29%
Finance Costs	995	1,043	-5%	923	8%	3,150	2,717	16%
Profit/(Loss) Before Tax	(491)	381	-2.3x	12	-42.0x	(138)	1,538	-1.1x
Income Tax Expense	114	146	-22%	141	-20%	458	597	-23%
Profit/(Loss) After Tax	(605)	235	-3.6x	(129)	-3.7x	(596)	941	-1.6x
Profit/(Loss) Attributable to Holding Co.	(688)	208	-4.3x	(109)	-5.3x	(674)	836	-1.8x
EPS	(1.34)	0.46	–	(0.23)	–	(1.26)	–	–
DPS	–	–		–	–	–	–	–

This table provides a clearer breakdown of SEARL’s financial performance across different metrics for the specified quarters and nine-month periods.

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Conclusion

SEARL’s 3QFY24 results reflect a decrease in revenue and profitability, mainly due to higher operating costs and reduced gross margin. The company continues to face challenges in managing its expenses, impacting its overall financial performance.

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Disclaimer:

The information in this article is based on research by Taurus 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.