International Steels Limited (ISL) reported earnings of PKR 2.3Bn (EPS: PKR 5.32) for 4QFY21, down 3% QoQ. Despite maintaining gross margin at 23.5%, the main reasons for the quarterly decline were higher distribution expenses (↑74% QoQ), other expenses (↑164% QoQ) and financial charges (↑37% QoQ). The bottom-line for FY21 clocked in at PKR 7.5Bn (EPS: PKR 17.16), up 14x YoY. The company also announced a final dividend of PKR 7.0/sh for 4QFY21, taking total FY21 DPS to PKR 10.0/sh. Key highlights of the result are summarized below: –
During 4QFY21, the company recorded revenue of PKR 18.9Bn (↑97/8%, YoY/QoQ) on the back of higher ex-factory prices (↑17.6% QoQ) and upbeat sales. Furthermore, FY21 revenue increased to PKR 69.8Bn, up 45% YoY.
The company maintained its gross margins from 3QFY21 at 23.5% in 4QFY21 due to excellent supply chain management. On the back of higher CRC prices, ISL reported its highest gross profit figure at PKR 4.4Bn (↑446/8% YoY/QoQ). Moreover, gross margins rose to 19.3% in FY21, compared to 8.8% in SPLY.
The sales and distribution expenses soared to PKR 447Mn (↑175/74% YoY/QoQ) in 4QFY21. On the other hand, the administration expenses increased 32% YoY but declined 35% QoQ to PKR 85Mn. On an annual basis, both distribution and admin expenses inched up to PKR 1.1Bn (↑19% YoY) and PKR 362Mn (↑38% YoY) in FY21.
Other expenses witnessed a steep increase to PKR 667Mn (↑190/164% YoY/QoQ) in 4QFY21. For FY21, other expenses clocked in at 1.3Bn (↑282% YoY).
Financial charges increased 37% QoQ but dropped 62% YoY to PKR 158Mn (↓61/12% YoY/QoQ). Finance cost declined to PKR 812Mn (↓65% YoY) in FY21.
Courtesy – BMA Capital Management Ltd.