Qudsia Bano

Ghandhara Tyre & Rubber Company Limited’s revenue from sales decreased 24% to Rs3.2 billion in the first quarter of the ongoing financial year (1QFY23) from Rs4.2 billion in the corresponding period of the previous fiscal. Sales in the replacement market were negatively impacted due to widespread flooding in Sindh, southern Punjab and Khyber Pakhtunkhwa provinces following heavy rains in August 2022.

However, the gross profit of the company nominally increased 3% to Rs566.5 million in 1QFY23 from Rs549.5 million recorded in 1QFY22. The company posted a net profit of only Rs18 million in 1QFY23, which was down 86% from Rs130 million earned over the corresponding period of FY22, reports WealthPK.

Performance in 2021-22

During the fiscal year 2021-22, the company’s gross sales jumped to Rs18.5 billion from Rs13.9 billion in FY21, posting an increase of 34% year-on-year.   The gross profit for FY22 stood at Rs2.4 billion, 17% up from Rs2.1 billion in FY21. However, the profit-after-tax for the year went down by 41% to Rs328.9 million from Rs562.3 million in FY21. The finance cost for the year was Rs748 million compared to Rs504 million the year before.

In order to avert the balance of payment crisis and manage inflation, the State Bank of Pakistan increased its policy rate at regular intervals, which resulted in an increase in the finance cost of the company. Moreover, an increase in raw material prices resulted in higher working capital financing. And the levy of super tax of Rs26 million was enacted for FY22. As a result, the profits for FY22 decreased from the previous year.

The earnings per share of the company demonstrated a mix trend during recent years. During FY20 the EPS stood negative at Rs2.72, but increased to Rs4.7 in FY21. It again dropped to Rs2.92 in FY22. The price earnings growth of the company also showed a mix trend during these years as in FY20. The growth was 0.06, which slightly improved to 0.07 in FY21 and dropped to -0.31 in FY22. The net profit margin (NPM) of the company also showed steady growth in recent years. During FY20, the NPM was -3.78%, which increased to 4.11% in FY20. However, the NPM again decreased in FY22 and stood at 1.92%.

About the company

Ghandhara Tyre and Rubber Company Limited, formerly the General Tyre and Rubber Company of Pakistan, was incorporated on March 7, 1963, as a private limited company, under the now repealed Companies Act, 1913. It was subsequently converted into a public limited company. The firm is engaged in manufacturing and trade of tires and tubes for automobiles and motorcycles.

Credit : Independent News Pakistan-WealthPk