KARACHI: The unconsolidated profit of Nishat Mills Limited (NML) recorded a growth of 84 per cent to reach Rs3.45 billion translating into the earnings per share (EPS) of Rs9.8 during the third quarter of fiscal year 2022.

The company recorded a profit of Rs1.87 billion (EPS: Rs5.3) during the same period of last year. This took the profits to Rs9 billion (EPS: Rs25.75) during the first nine months of fiscal year 2022, up by 148 per cent.

Ali Asif at Insight Securities said that the result is above from expectations, mainly because of higher than expected gross margins.

The revenue during the period under review clocked-in at Rs31 billion, up 71 per cent on a year-on-year basis. Whereas, gross margins clocked-in at 17 per cent, compared with 13 per cent during the same period of last year, up 4.4ppt mainly due to inventory gain on cotton procurement.

Other income of NML was down 7 per cent to Rs1.4 billion, against Rs1.5 billion, due to the absence of dividend from Lalpir Power Limited and Pakgen Power Limited.

The company’s finance cost increased 72 per cent on a year-on-year basis and 41 per cent on a quarter-on-quarter basis to clock in at Rs685 million due to higher short term debt in the previous quarter.

The gross margins for the quarter clocked in at 30 per cent, compared with 35 per cent during the same period of last year and 29 per cent during the fourth quarter of 20211. “The decline in margins is possibly attributable to the addition of new resources in the workforce,” Asif added.

The other income of the company during the quarter clocked-in at Rs334 million, mainly due to exchange gain, attributable to depreciation of rupee against the dollar.