Packages Limited announced its results for Q1 2019, ending on March 31st. The packaging company posted a consolidated profit of Rs. 702 million, showing a growth of 187% as compared with Rs. 244 million in the same period last year.
Overall net sales of the company were Rs. 14.65 billion, up by 9.33% against Rs. 13.40 billion in the corresponding period of the previous year. Higher sales from the packaging division and rental income from Packages Mall played a vital role in bringing up the sales, stated Topline Securities.
The rise in net income is mainly accredited to an investment income of Rs. 1.09 billion which was added to the company’s inflow.
The cost of sales grew by 9.65% to Rs. 12.55 billion as compared with Rs. 11.44 billion. The gross margins of the company remained almost flat despite a significant devaluation of Pakistani Rupee against the US dollar.
Other expenses increased to Rs. 119 million, distribution and marketing expenses increased by 26.11% to Rs. 756 million on the back of an increase in sales, activities and the inflationary environment in the economy. Finance costs of the company were up by a massive 80.22% to Rs. 771 million due to higher interests rates in the country.
Earnings per share of the company were increased to Rs. 7.50 from Rs. 1.93 in the period under view.
Packages Ltd to Undergo Internal Restructuring and Reorganization
The Board of Directors of Packages Limited has evaluated and approved the structure of internal restructuring/reorganization of various businesses of the company, with an objective to create a holding company.
According to the stock filing, the proposed arrangement will help develop operating synergies across businesses, managing operations in a focused manner and streamlining the ownership structure. This is in line with international practices.
In this regard, the board decided that Packages will incorporate two wholly-owned subsidiaries and transfer:
- Its manufacturing businesses including folding cartons, flexible packaging, consumer products, and mechanical fabrication & roll covers along with all relevant assets, operations, and corresponding liabilities into a separate 100% wholly owned subsidiary (the Converting Business)
- Its investments business comprising shares of various companies, operations along with corresponding liabilities, if any, into another 100% wholly owned subsidiary (Investment Business) against the issue of shares by such wholly owned subsidiaries in favor of Packages (collectively proposed transfer).
The proposed restructuring shall not affect the rights of the shareholders of Packages.
Furthermore, the notification added that Packages will be holding the company and all assets, properties, and liabilities other than assets, operations and corresponding liabilities being transferred to wholly-owned subsidiaries as part of Converting Business and Investment Business will remain with Packages.
PKGS’s shares at the bourse were trading at Rs. 300, up by Rs. 6.00 with a turnover of 4,700 shares on Thursday.