Abnormal hike in expenditures: Exide Pakistan posts mega loss of Rs 504.5 m

Company chairman foresees adverse impact on profitability in FY 2019-20

M Jahangir Hayat

LAHORE: The Exide Pakistan Limited has posted huge loss after taxation of Rs 504.5 million for the financial year 2018-19 against profit of Rs 21.6 million recorded last year 2017-18, the company’s annual report indicated.
The net sales revenue of Exide Pakistan Limited for the financial year 2018-19 has decreased to Rs 9.507 billion down by 22.7 percent as compared to Rs 12.301 billion during the last financial year due to decrease in sales volume of Battery Division, the report said.
The gross profit of the company for the year under review decreased from Rs 13,56 million to Rs 972.2 million down 28.3 pc mainly due to increase in cost of raw-material and lower sales revenue, the report added.
Selling and distribution expenses increased by 8.1 percent and administration and general expenses increased by 11.5 percent from 109.3 million to 121 million due to inflation, the report said adding that the operating loss Rs 151.7 million recorded as against last year profit achieved Rs 336.2 million.
The report said that the financial charges also went up to Rs 259.1 million from Rs 141.3 million on account of higher borrowing and mark-up rates, the report added.
The loss before tax for the year under review was Rs 410.8 million compared to last year profit of Rs 194.0 million, the report said adding that loss after taxation for the period under review was Rs 504.5 million as against profit of Rs 21.6 million recorded last year.
The report also said that the loss per share is recorded at Rs 64.94 compared to earnings of Rs 2.78 per share of last year.
The company chairman said that it is anticipated that indigenous battery industry will face tough competition due to capacity of existing battery plants, new entrants, inflow of imported batteries and changing market dynamics.
He added that profitability in the next year will also be adversely impacted owing to increase in prices of basic raw-materials and utilities, labour charges and devaluation of Pak rupee.
He said that nevertheless the company management is determined to avail full benefits of the opportunities by continued focus on quality, productivity, cost control and sales services to improve its competitiveness.
The experts said that the share value of the company will tend to decrease further from Rs 110.27 per share putting the shareholders to face more losses in the next financial year.
They recommended that the company should overcome the uncalled for expenditures to strengthen the financial health of the company.

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