Treet Corporation posts losses during 3QFY22

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Treet Corporation (TREET) announced its 3QFY22 financial results, where the company posted consolidated loss of Rs239mn (LPS: Rs1.35) against profit of Rs14mn (EPS: Rs0.08) in same period last year. The result came in-line with our expectation.

The decline in earnings is attributed to higher commodity prices coupled with rising ocean freight cost, which pushed them further into the losses.

This takes 9MFY22 earnings to Rs102mn (EPS: Rs0.59) against a loss of Rs321mn (LPS: Rs1.78).

Revenues of the company declined by 1% YoY during 3QFY22, owing to decrease in their blade segment. We believe, this was because of decline in their exports sales.

Gross Margins decreased by 9.5pts YoY to clocked in at 13% in 3QFY22 due to aforementioned reasons. Sequentially gross margins fell by 8.3pts QoQ. Despite the super commodity cycle in 2QFY22, company was able to sustain their margins in 2QFY22 due to older inventory.

Finance cost significantly increased by 24% to Rs296mn amidst higher interest rates.

Other Income declined by 30% YoY to Rs55mn in 3QFY22 possibly due to lower short term investments and export rebates.

The company booked taxation expense of Rs15mn in 3QFY22 vs. Rs105mn in same period last year.

Courtesy – AHCML Research

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