International Steels Limited (ISL) announced its financial results for 4QFY23 wherein company recorded earnings of Rs1.9bn (EPS of Rs4.46) vs Rs57mn (EPS of Rs0.13) in 4QFY22.

This takes full-year FY23 earnings to Rs3.5bn (EPS of Rs8.09), down 35% YoY.

Along with the result, ISL also declared a final cash dividend of Rs2.5/share, taking full year FY23 dividend to Rs5.5/share.

The earnings came higher than expectations due to higher-than-expected gross margins.

We estimate gross margins of 13.5% for 4QFY23 however actual gross margins came at 23.6%. We believe major deviation in gross margins came from higher CRC and HRC spreads.

ISL’s revenue clocked in at Rs18.9bn in 4QFY23, down 9% YoY and 21% QoQ due to lower volumetric sales amid depressed construction activities, lower automobile and two/three-wheeler sales.

Finance cost reduced to Rs217mn in 4QFY23 down 48% YoY and 45% QoQ due to removal of 100% cash margin requirement by SBP for import of HRC.

Effective Tax Rate clocked in at 38% in 4QFY23 vs 28% in 3QFY23. The higher taxation is due to implementation of 10% Super Tax.

Courtesy – Topline Securities