Al-Ghazi Tractors Announces Another Profitable Quarter in 2018

Al-Ghazi Tractors Limited (AGTL) reported earnings of Rs 718 million in the second quarter that ended on June 30, up 6.53% compared to Rs 674 million in the same period last year.

The result is below market expectations, said the analysts.

Earnings per share (EPS) increased to Rs 12.39 from an EPS of Rs 11.64 in the period under review.


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Along with the result, the company announced an interim cash dividend of Rs 30 per share for the half year ending 2018.
The company recorded sales of Rs5.6 billion, up by 24.18% from Rs 4.55 billion in the 2nd quarter.

The company has a technical collaboration with CNHI – Case New Holland to manufacturing Holland (Fiat) tractors in Pakistan. Al- Ghazi sold 6951 units, up 17.67% during the second quarter as compared to 5907 units in the same period last year.

Topline surged by 24% YoY during Q2CY18 on the back of 18% YoY volumetric growth in tractor sales. The company booked an effective tax rate of 39% in Q2CY18 owing to the realization of 3% super tax.

Gross margins during Q2CY18 trimmed by 3.3pps YoY to 24.8% due to rise in raw material costs which resulted from Rupee devaluation and rise in commodity prices.

In order to counter the rise in input costs, prices of tractors were raised by 1.2% in May which did not pass on the complete increase in input prices.

Along with the 2nd quarter result, half year result was also announced where the company reported a profit of Rs 1.8 billion, up by 13.21% from Rs 1.59 billion in the same period last year.

Earnings per share (EPS) for the HY increased to Rs 31.99 from an EPS of Rs 27.50 in the period under review. The sales for H1CY18 surged by 33% YoY.

Other income of the company reduced significantly by 55%, while there was a major increase of 1030% in the Finance Cost. The Company’s total Tax Payments went up by 13.7%.

AGTL’s script at the bourse was trading at Rs 705, up by Rs 9 with a turnover of 4,600 shares.

Al-Ghazi is one of the only two major players in the tractor industry in Pakistan. The company manufactures different tractor variants as well as generators and agricultural implements like cultivators, ploughs, sprayers, etc. Tractors make up Al-Ghazi’s core business.


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