Ayesha Mudassar

Kohinoor Textile Mills Limited (KTML) witnessed a healthy increase of 77% and 106%, respectively, in gross and after-tax profits, in the first quarter of the current fiscal year (1QFY24) as compared to 1QFY23, WealthPK reports. As per the company's quarterly report, KTML posted a gross profit of Rs2.7 billion and after-tax profit of Rs982 million in 1QFY24. The significant rise in gross profit caused a substantial increase of 119% in profit from operations. Moreover, the company experienced a 93% increase in profit-before-tax.

KTML’s revenue amounted to Rs14.44 billion, representing a 51% increment from the corresponding period of the earlier fiscal. The robust performance of the company in the period under review was driven by an increase in exports, a one-off positive impact from rapid devaluation and savings from the company’s self-generation of power.

Cashflow highlights

The company’s operating cash flows decreased significantly due to notable increase in the cost of raw materials and fuel prices. However, the considerable increase in financing cashflows is ascribed to the funding acquired for the expansion and modernisation of production facilities, as well as the implementation of solar-based power generation initiatives.

Financial position highlights during FY23

The analysis of the company’s financial position showed a growth of 16% in its non-current assets during the fiscal year ending on June 30, 2023, compared to FY22. This rise indicates the company’s investment in the modernisation of production facilities.

Moreover, the rise in current assets is primarily attributed to an increase in the stock-in-trade held, which increased from Rs5.96 billion in 2022 to Rs8.86 billion in 2023, which aligns with the company’s regular business expansion requirements. The equity (share capital and reserves) increased by 9% from Rs24.30 billion (2022) to Rs26.39 billion (2023). During FY23, the long-term borrowing grew 53% compared to FY22. This growth shows that the company took additional long-term liabilities or debt for the expansion and modernisation of production facilities and solar-based power generation plants. Furthermore, the rise in short-term borrowing was in line with the growing business operations and high working capital demands of the company.

Company profile and principal business activities

Kohinoor Textile Mills is a public limited company incorporated in Pakistan under the Companies Act, 1913 (now the Companies Act, 2017), and listed on the Pakistan Stock Exchange Limited. In pursuit of sustainable growth, the company has strategically embraced a policy of horizontal integration encompassing weaving, processing, and home textiles activities to address the dynamic challenges posed by the market.

Future outlook

Despite prevailing economic challenges, the company continues to invest with a focus on quality, capacity increase and diversification of its product lines. Further, KTML continues to rapidly expand solar energy generation to become a 'green company'.

Credit: INP-WealthPk