Husein Industries Limited recently released its financial statement for the fiscal year ending June 30, 2024. The company’s performance over the year reveals several notable trends, including a significant rise in revenue but also escalating costs. Let’s break down the key figures and explore their implications.
Revenue Surge and Gross Profit Growth
One of the standout aspects of Husein Industries’ financial statement is the sharp increase in revenue, from Rupees 160.6 million in 2023 to an impressive Rupees 362.9 million in 2024. This more than 125% rise in revenue reflects the company’s success in either increasing its sales volumes, raising prices, or both. The increased revenue has also led to a notable improvement in gross profit, which grew from Rupees 94.7 million in 2023 to Rupees 127.1 million in 2024.
However, this growth in gross profit has been tempered by the fact that cost of sales and expenses rose sharply, from Rupees 65.8 million in 2023 to Rupees 235.7 million in 2024. This highlights rising production costs, supply chain constraints, or potentially increased labor costs.
Administrative and Finance Costs Weigh Down Operating Profit
Despite strong gross profit growth, operating profit was impacted by rising administrative and finance costs. Administrative expenses increased from Rupees 33.6 million in 2023 to Rupees 40.2 million in 2024. This could be attributed to increased overhead costs, expansion, or investments in organizational infrastructure. Meanwhile, finance costs saw a steep rise from Rupees 45.0 million in 2023 to Rupees 60.5 million in 2024, indicating that the company may have taken on more debt or faced higher interest rates during the period.
As a result, operating profit grew from Rupees 61.1 million in 2023 to Rupees 86.9 million in 2024, a more modest increase compared to the surge in revenue.
Taxes and Levies: An Impact on the Bottom Line
Before levies and income taxes, the company reported a profit of Rupees 26.2 million, up from Rupees 17.3 million in 2023. However, the company faced levies of Rupees 119,211 in 2024, lower than the Rupees 155,087 levied in 2023.
After accounting for levies, the profit before income tax stood at Rupees 26.1 million for 2024, up from Rupees 17.1 million in 2023. The net taxation expense for the year was Rupees 4.2 million, leaving a profit after income tax of Rupees 30.3 million for 2024, a strong improvement over the Rupees 21.1 million in 2023.
Comprehensive Income: A Drop Due to Lack of Asset Revaluations
One key difference between 2023 and 2024 is the absence of revaluations of fixed assets in 2024. In 2023, the company had a revaluation surplus of Rupees 504.9 million and deferred tax thereon of Rupees 372.2 million, contributing significantly to the total comprehensive income. However, in 2024, no such revaluation was recorded, leading to a total comprehensive income of Rupees 30.3 million, a drastic decline from Rupees 393.3 million in 2023.
Earnings Per Share
The company’s earnings per share (EPS) have improved from Rupees 1.98 in 2023 to Rupees 2.86 in 2024, which is a positive signal for investors, reflecting better profitability on a per-share basis.
Final Thoughts
Husein Industries has demonstrated a strong revenue performance in 2024, but rising costs in sales, administration, and finance have tempered the impact on profitability. While the company posted significant improvements in net profit and earnings per share, the lack of revaluation gains from fixed assets compared to the previous year has led to a substantial decline in comprehensive income.
As the company moves forward, its ability to manage costs, improve operating efficiencies, and continue revenue growth will be crucial to sustain its profitability.