Gul Ahmed Textile Limited has maintained its profit growth of 65 percent in the first half of the financial year 2020-21, tapping into business opportunities in exports and local markets.
The company made a profit of Rs. 1.76 billion during July to December 2020 as against the profit of Rs. 1.069 billion recorded in the corresponding period of the last year.
Textile producers in Pakistan faced tough operational and business challenges last year, with the COVID-19 pandemic ceasing the working and business environment at the local and global levels.
Gul Ahmed reported losses and also opted for massive layoffs as a result. The reopening of the businesses and the emerging opportunities in the local textile sector helped the textile producer bounce back with its potential and capacity.
The higher profitability was the cumulative result of effective capacity utilization, higher sales, effective cost curtailment and control over administrative cost, etc.
The export registered an enormous increase of 58 percent. However, local sales grew marginally by 6.6 percent due to the lockdown and restricted operating hours of retail outlets.
According to the financial report, the company is focusing on investment in balancing and modernization through technologically advanced machinery and measures to rationalize costs, which would further enhance the sales and production efficiency.
Gul Ahmed Plans To Get Listed Its Subsidiary at PSX
The management of the Gul Ahmed Textile is mulling to get its subsidiary listed at Pakistan Stock Exchange (PSX) as a separate entity. The subsidiary is operating in a local market, with the business witnessing consistent expansion.
According to the report, the management of Gul Ahmed Textile has seen an uptick in domestic demand, as the retail sector is performing well and has been supported by its digital/e-commerce platform.
Considering the positive changes and as the impact of COVID-19 subsides and economic activities resume to a pre-pandemic level, the circumstances seem supportive to revive the hiving out of the retail business that was put on hold due to COVID Pandemic.
The growth in the retail business, as planned, would leave it as a 100 percent subsidiary of Gul Ahmed with a prospect to list it as a separate entity on the PSX.
The management is confident to deliver improved results in the coming quarters. However, the risks like further increase in raw material prices, changes in finance cost, change in utility policy of the government, etc., may have a material impact.
