Introduction
Sazgar Engineering Works Limited, a notable player in Pakistan’s automotive and engineering sector, has released its financial results for the first quarter ending September 30, 2024. The company’s board of directors convened on October 26, 2024, to review and approve these quarterly results. This report delves into the financial highlights, including revenue, expenses, and profitability, while also covering the significant dividend announcement for the period.
Key Financial Announcements
In the letter addressed to the General Manager of the Pakistan Stock Exchange, Sazgar Engineering Works Limited communicated several critical financial decisions and announcements:
- Cash Dividend:
The board declared an interim cash dividend of Rs. 10 per share for the quarter, representing a 100% payout for shareholders. This decision underscores the company’s financial stability and commitment to rewarding its investors. - Bonus Shares:
No bonus shares were announced for this quarter. - Right Shares:
The company did not declare any right shares, indicating a stable equity structure. - Other Corporate Actions and Price-Sensitive Information:
No additional entitlements or price-sensitive actions were reported in this period. - Financial Results:
The detailed financial results showcase a remarkable increase in sales, profitability, and earnings per share (EPS) compared to the same period last year.
Condensed Interim Statement of Profit or Loss
The following section analyzes the financial performance of Sazgar Engineering Works Limited for the first quarter of the fiscal year 2024-25.
Sales and Revenue Growth
The company reported net sales of Rs. 26,331,994,025, a significant increase from Rs. 8,044,264,447 in the corresponding quarter of the previous year. This sharp rise in sales reflects increased market demand and potentially new product lines or expanded operational capabilities.
Cost of Sales and Gross Profit
- Cost of Sales: The cost of sales for the quarter stood at Rs. 18,711,356,826, up from Rs. 6,533,692,637. This increase aligns with the sales growth and is likely a result of heightened production volumes and raw material costs.
- Gross Profit: The gross profit surged to Rs. 7,620,637,199 from Rs. 1,510,571,810 last year, marking an impressive increase in the company’s profitability. The gross profit margin indicates robust operational efficiency, with sales growth outpacing the increase in costs.
Operating Profit
After accounting for distribution, marketing, and administrative expenses, the operating profit reached Rs. 6,757,599,004, compared to Rs. 1,145,992,122 in the previous year. This notable increase in operating profit suggests effective cost management and a strong market presence.
Other Operating Income and Finance Costs
- Other Operating Expenses: Amounted to Rs. 488,034,673 this quarter, up from Rs. 80,675,202 last year. Despite the rise, it was offset by the substantial growth in other operating income.
- Other Operating Income: The company recorded other income of Rs. 403,388,762, a significant increase from Rs. 79,606,191, enhancing overall profitability.
- Finance Costs: Finance expenses stood at Rs. 57,455,177, reflecting an increase from Rs. 35,555,111 in the previous year. The rise in finance costs could be due to additional borrowing to support expanded operations or investments.
Net Profit and Earnings Per Share (EPS)
- Profit Before Taxation: The profit before taxation reached Rs. 6,615,047,646, a dramatic improvement from Rs. 1,109,193,622 in the previous year, indicating the company’s strong profitability.
- Net Profit: After accounting for taxation expenses, the net profit for the period was Rs. 4,217,473,277, significantly higher than the Rs. 658,537,265 reported last year. This growth in net profit illustrates Sazgar Engineering’s enhanced market competitiveness and profitability.
- Earnings Per Share (EPS): Basic and diluted EPS for the quarter was Rs. 69.77, compared to Rs. 10.89 in the previous year, signaling substantial value generation for shareholders.
Conclusion
Sazgar Engineering Works Limited has showcased a robust financial performance in the first quarter of the fiscal year 2024-25, marked by impressive revenue growth, enhanced profitability, and a generous dividend payout. The company’s substantial increase in net sales, coupled with efficient cost management, has led to a remarkable boost in both operating and net profits. With a 100% interim dividend payout, Sazgar Engineering demonstrates its commitment to shareholder value and sustained growth in the Pakistani automotive and engineering sectors.