Business

Image Pakistan Ltd Profit Declines 27% in Q2 FY24

Image Pakistan (PSX: IMAGE) announced its financial results for the three months that ended on 30 December 2024 (2QFY24) today, wherein it posted consolidated earnings of Rs. 65 million, down 27 percent YoY and 64 percent QoQ.

This takes 1HFY24 earnings to Rs. 88 million (EPS of Rs1.87), up 43 percent YoY. According to Topline Securities, the decline in YoY and QoQ earnings is primarily due to lower gross margins and higher effective tax rates.

IMAGE recorded a topline of Rs. 875 million in 2QFY24, up 10 percent QoQ and 67 percent YoY. This takes 1HFY24 sales to Rs. 1,669 million up 60 percent YoY.

Gross margins declined to 41 percent in 2QFY24, compared to 43 percent in 2QFY23 and 47 percent in 1QFY24. The decline in gross margins is primarily due to seasonal effects, where the company had to offer discounts on Christmas and Black Friday to clear seasonal ending stocks, as per management.

Effective tax rate clocked in at 41 percent in 2QFY24 compared to 8 percent in 2QFY22 and 6 percent in 1QFY24. The higher tax expense in 2QFY24 is due to the absence of depreciation tax allowance, which the company recorded in the initial years of CAPEX, as per management.

Finance cost rose by 243 percent YoY and 20 percent QoQ, attributed to higher interest rates and increased borrowings by the company.

Along with the results, the company announced 75 percent right shares at Rs. 10 per share. As per the notice, the funds will be utilized to finance the expansion of production capacity and meet working capital needs, ensuring sustained business growth.

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ProPK Staff