In 1QFY24, Roshan Limited (RPL) recorded an unconsolidated net profit of PKR 106.77 million (EPS: PKR 0.75), demonstrating an increase of 89% YoY from the net profit of PKR 56.57 million (EPS: PKR 0.40) in the corresponding period of the previous year.
The company’s revenue experienced a notable surge, reaching PKR 3.11 billion in 1QFY24, indicating substantial 16% YoY growth from the PKR 2.69 billion reported in the same period last year. The improved sales strategy and operational efficiencies were the primary contributors to the enhanced revenue of the Company.
Cost of sales decreased by 2% YoY to PKR 2.76 billion in 1QFY24. In contrast, administrative expenses and distribution expenses decreased by 6% YoY and 2% YoY to PKR 59.70 million and PKR 95.24 million, respectively, in 1QFY24.
The finance cost of the company increased by 18% YoY to PKR 87.99 million in 1QFY24 from PKR 74.51 million in SPLY. Gross profit recorded a substantial increase of 9% YoY, reaching PKR 355.33 million in 1QFY24.
In FY23, RPL witnessed an increase of 16% YoY to PKR 10.25 billion compared to PKR 8.87 billion in FY22. Gross profit increased by 39% YoY to PKR 1.28 billion during the period under review. Profit after tax clocked in at PKR 150 million (EPS: PKR 1.06) in FY23 as compared to a net profit of PKR 265 million (EPS: PKR 1.87) in FY22.
The primary factors impacting the net profit of the Company were restrictions on the import of raw material, higher cost of sales (PKR 192 million), exchange loss (PKR 86 million), higher freight cost (PKR 74 million), and higher finance cost (PKR 56 million) in FY23.
In FY23, the margins of the Company continuously increased to 12% as compared to previous years (FY18: 7%).
In FY21, Roshan Sun Tao Paper Mills (Pvt) Limited became a wholly-owned subsidiary of RPL. For this, the civil work is under progress, but the machinery is pending. The estimated initial cost of this project is five billion rupees, which will be financed with a 60:40 debt to equity ratio. With a capacity of 100,000 tons, the project is expected to be completed in a couple of years.
Currently, the Company is recycling 42,000-45,000 tons of paper, operating at a capacity of 65%, which is likely to improve further subject to improved demand and supply.
The Company’s products are categorized as corrugated and flexible packaging. Currently, the Company caters to local demand and expects to provide product substitution also after the Sun Tao project is completed.The management shared that the recent increase in gas prices has no impact on the cost of the Company.
The Company ran campaigns to educate the farmers about sustainable packaging and initiated several green initiatives to support the sustainable growth of the Company.
Going forward, the management expects the economy of Pakistan to improve in the backdrop of the IMF plan and opening of LCs. Cost optimization, operational efficiencies, and going green are the paths toward future growth of the Company.
Important Disclosures
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