Interloop Limited (ILP), a textile and garments exporter company, recorded profits of Rs. 4.96 billion in the first quarter of the financial year 2022-23, exceeding industry expectations.

According to the company’s financial results, profits have increased by 85 percent as compared to Rs. 2.69 billion recorded in the same period last year

The earnings per share (EPS) of the company increased to Rs. 5.31 in 1QFY23 from Rs. 2.88 last year but decreased from 5.74 in the final quarter of FY22.

Gross margins stood at 33.2 percent QoQ, however, increased from 28.6 percent YoY recorded in 1QFY22 due to inventory gains.

Sales clocked in at Rs. 30.46 billion during the period, up by 58 percent YoY amid increased utilization levels of both the Hosiery and Denim segments. Management says the Denim segment was operating at full capacity and hosiery at 85 percent utilization levels, according to a report by Topline Securities. Besides this, the exchange gain contribution in revenue was around Rs. 3 billion.

Cost of sales soared by 48 percent YoY to Rs. 20.35 billion amid increased cotton prices in the local and international markets, and higher depreciation expense on account of Hosiery Plant-V and Apparel expansions.

Distribution expenses increased by 42 percent YoY and 21 percent QoQ to Rs. 1.15 billion. As a percentage of sales, distribution expenses stood at 3.8 percent compared to 3.1 percent in 1QFY22. Administrative expenses jumped by 67 percent YoY to Rs. 1.6 billion due to increasing inflationary pressures and expansion.

The finance cost of the company observed a massive increase of 238 percent YoY and 35 percent QoQ on higher borrowing and interest rates.

The effective tax rate of the company clocked in at 6.5 percent during the quarter compared to 5.8 percent in 1QFY22 and 8.8 percent in the last quarter of FY22.

Source: Pro Pakistan