Sazgar Engineering Works Limited (SAZEW) announced its financial result for 1HFY25 today whereby the company posted a Profit After Tax (PAT) of PKR 6,625mn (EPS: PKR 109.60), increasing by 4.7x YoY. During 2QFY25, the company’s profitability amounted to PKR 2,408mn (EPS: PKR 39.83) increasing by 3.2x YoY. However the profitability declined by 43% QoQ. Alongside the result, the company announced an interim cash dividend of PKR 10.0/share in 2QFY25 taking the payout to PKR 20.0/share in 1HFY25.

Result Highlights       

•        Net sales for 1HFY25 amounted to PKR 44,695mn, up 3x YoY. On a quarterly basis, revenue surged by 2.8x YoY to reach PKR 18,363mn. However, QoQ sales declined by 30%, primarily due to lower volumetric sales of Haval. According to our analysis, approximately 300 units were sold in Dec’24, bringing the volumetric sales for 2QFY25 to 1,886 units, down 27% compared to 2,593 units sold in the previous quarter.

•        During 2QFY25, gross margins were recorded at  28.4% compared to 24.8% recorded in SPLY. The increase in gross margin is driven by the increase in hybrid sales within their Haval lineup.

•        Other income inched up by 3.1x YoY to clock in at PKR 333mn in 2QFY25, which is mainly because of increase in cash and cash equivalent by 6.5x.

•        Finance cost in 2QFY25 increased by 2.6x YoY amid increase in borrowings.

•        The company declared an interim dividend of PKR 10.0/share in 2QFY25, taking the total payout to PKR 20.0/share in 1HFY25.

•        The company booked an effective tax 43% in 2QFY25 vis-à-vis 39% in SPLY.

Courtesy – AHL Research