ANALYSTS’ BRIEFING

RESULTS FOR THE 4th QUARTER & YEAR ENDED

30 JUNE 2022
 HIGHLIGHTS FOR THE 4TH QUARTER & YEAR ENDED 30 JUNE 2022

F N
O POLITICAL UNSTABILITY
I 3% FURTHER TAX ON UNREGISTERED PERSON, LATER WITHDRAWN
U N
R UKRAINE CRISIS AND DISRUPTION OF GLOBAL SUPPLY CHAIN E
REDUCTION IN MINIMUM TAX FROM 1.25% TO 0.25% FOR
T RETAILERS
H WIDENING CURRENT ACCOUNT DEFICIT AND DECLINING FX
INCREASE IN MINIMUM VALUE OF SALE TAX
RESERVES
INCREASE IN MINIMUM VALUE OF SALE TAX
Q
U INCREASE IN EXCHANGE RATE, INFLATION AND M
CUSTOM VALUATION CHANGED TO LMB
A INTEREST RATES O
R N
SIGNIFICANT FCAs FOR MAY-22 & JUNE-22 INCREASE IN ELECTRICITY COST DUE TO FUEL CHARGES
T T
ADJUSTMENT AND CEASATION OF DISCOUNTS
E H
SUPER TAX S
R INCREASE IN SCRAP PRICES
 FY – 22 Vs 21

SALES GROSS Margin OPR. Margin

Up by down down
REVENUE PROFIT by PROFIT by
48% 0.4% 0.2%
Rs. 58.1 Bn Rs. 6.4 Bn Rs. 4.3 Bn

Margin Down
down PRIME BAR by
1,362
NET PROFIT by
1.2%
EPS Rs.
0.14
SOLD MT

Rs. 1.3 Bn Rs. 4.46 361,587 MT

 MARGINS & EPS

GROSS PROFIT OPR. PROFIT NET PROFIT EPS

FY 22
11.16% 7.54% 2.28% 4.46

FY 21
11.58% 7.73% 3.49% 4.61
 MARGINS & EPS

GROSS PROFIT OPR. PROFIT (LOSS) / NET PROFIT (LPS) / EPS

4Q FY 22
8.90% 4.93% -3.25% (1.71)

3Q FY 22
10.73% 7.64% 3.33% 1.79
 PROFIT OR LOSS STATEMENT
Year ended Year ended 30 Qtr. Ended 30 Qtr. Ended 31
% % % %
30 June. 2022 June. 2021 June. 2022 Mar. 2022
Rs. ‘000 Rs. ‘000 Rs. ‘000
Sales 58,184,281 100 39,218,453 100 15,647,058 100 15,915,681 100
Cost of sales (51,692,794) 88.84 (34,676,316) 88.42 (14,254,706) 91.10 (14,208,036) 89.27
Gross profit 6,491,487 11.16 4,542,137 11.58 1,392,352 8.90 1,707,645 10.73
Distribution cost (1,203,640) 2.07 (945,620) 2.41 (393,056) 2.51 (307,667) 1.93
Administrative cost (735,971) 1.26 (554,615) 1.41 (224,682) 1.44 (156,826) 0.99
ECL (Allowance) / Reversal (5,177) 0.01 69,598 0.18 5,441 0.03 17,144 0.11
Other charges (186,445) 0.32 (123,789) 0.32 (15,777) 0.10 (45,844) 0.29
Other income 24,507 0.04 45,724 0.12 1,178 0.01 2,004 0.01
Operating profit 4,384,761 7.54 3,033,435 7.73 765,457 4.89 1,216,456 7.64
Finance cost (2,306,697) 3.96 (1,649,484) 4.21 (802,597) 5.13 (650,236) 4.09
Profit / (loss) before tax 2,078,064 3.57 1,383,951 3.53 (37,140) 0.24 566,220 3.56
Taxation (752,549) 1.29 (15,692) 0.04 (471,394) 3.01 (35,653) 0.22
Profit / (loss) after tax 1,325,515 2.28 1,368,258 3.49 (508,534) 3.25 530,567 3.33
 TAXATION & PROFITABILITY
1,000,000

800,000

Rupees in thousands 600,000

400,000

200,000

(200,000)

(400,000)

(600,000)
Q1 Q2 Q3 Q4
Profit / (loss) before tax Tax expense Net Profit / (Loss)
Key elements effecting 4th Quarter:

Impact on PBT
FCA for the month of;
- May @ 9.5 / kwhs 203,555,104
- June @ 11.37 / kwhs 285,150,656
488,705,760
Tax impact
Super tax @ 10% 126,088,029 A
Deferred tax due to increase in rate from 29%to33% 383,829,705 B
Tax impact 509,917,734

Had there been no Super tax: Super tax (A+B) After Super tax
Tax expense would have been for year 242,631,771 509,917,734 752,549,505
Profit after tax 1,835,433,086 (509,917,734) 1,325,515,352

Had there been no Super tax & FCA for 4th Qtr: Super tax (A+B) FCA After Super tax & FCA
Tax expense would have been for year 384,356,442 509,917,734 (141,724,671) 752,549,505
Profit after tax 2,182,414,176 (509,917,734) (346,981,090) 1,325,515,352
 QUANTITY AND PRICE VARIANCE – 4Q Vs. 3Q FY22
4Q-FY 22 3Q-FY 22 VARIANCE AMOUNT ‘000
SALES

QUANTITY (10,152) 161.59 (1,640,451)

88,340 98,492
PRICE (IN THOUSANDS) 177.12 161.59 15.53 88,340 1,371,828
NET SALES VARIANCE (268,623)
COST OF SALES
QUANTITY 88,340 98,492 (10,152) (144.26) 1,464,442
PRICE (IN THOUSANDS) (161.36) (144.26) (17.11) 88,340 (1,511,112)
NET SALES VARIANCE (46,670)

NET CHANGE IN GROSS PROFIT (315,293)

GROSS PROFIT
QUANTITY 88,340 98,492 (10,152) 17.34 (176,009)
PRICE (IN THOUSANDS) 15.76 17.34 (1.58) 88,340 (139,284)
NET GROSS PROFIT VARIANCE (315,293)
 RECONCILIATION OF PROFIT AFTER TAX
QUANTITY AND PRICE VARIANCE IMPACT Rs. ‘000’ REMARKS

GROSS PROFIT DECREASE (315,293) As explained in above table.

Due to advertisement Rs. 58 million for advertisement campaigns and National retailers'
DISTRIBUTION COST INCREASE (85,388)
event and increase in salaries by Rs. 30 million due to bonus.

ADMINISTRATIVE COST INCREASE (67,856) Mainly due to due salaries Rs. 54 million because of bonus
Increase in ECL is in line with receivable. In March -22 reversal was higher as compared to
EXPECTED CREDIT LOSS INCREASE (11,703) June-22 due to a highest collection of Rs. 7.0 billion resulting in bringing down the
receivable for older time buckets having higher default rate.

OTHER CHARGES DECREASE 30,067 Mainly decreased due to WPPF/WWF because of higher profits in 3rd quarter FY22

OTHER OPERATING INCOME DECREASE (827) Disposal proceed from sales of fixed assets.

Mainly increased due to increase in short term borrowings from Rs. 18.8 billion to Rs.
FINANCE COST INCREASE (152,361) 19.5 billion primarily due to rupee devaluation and scrap prices. Average interest have
also increased from 11.12% to 12.97% in 4Q FY22.

Significant increase is to imposition of super tax @ 10% having impact of Rs. 126 million
and increased in rate of deferred tax from 29% to 33% due to super tax for FY-23 and
TAXATION INCREASE (435,740)
onwards (4%) as announced in approved finance bill. Thus having additional charge of
deferred tax amounting to Rs. 383 million.

NET VARIANCE (1,039,101)

PAT 4TH QUARTER FY 22 LESS 3RD QUARTER FY22 (1,039,101)

UNRECONCILED AMOUNT -
 STATEMENT OF FINANCIAL POSITION
ASSETS 30 JUNE. 2022 % 30 JUNE 2021 %

Non-current assets ------------Rs. ‘000’----------- ------------Rs. ‘000’-----------

Property, Plant & Equipment 21,578,252 49.55 20,146,267 55.40

Right of use assets 76,410 0.18 100,334 0.28
Intangible assets 11,872 0.03 18,624 0.05
Long term investment 14,289 0.03 15,289 0.04
Long term deposits 203,993 0.47 152,349 0.42
21,884,816 50.25 20,432,863 56.19
Current assets
Stores and spares 2,756,628 6.33 1,455,826 4.00
Stock in-trade 11,017,657 25.30 5,992,162 16.48
Trade debts 5,680,426 13.04 6,320,346 17.38
Loans and advances 53,447 0.12 34,044 0.09
Trade deposits and prepayments 31,260 0.07 21,072 0.06
Other receivables 266 0.00 275,213 0.76
Taxation - net 1,769,109 4.06 1,456,362 4.00
Cash and bank balances 356,869 0.82 378,573 1.04
21,665,662 49.75 15,933,598 43.81
TOTAL ASSETS 43,550,478 100.00 36,366,461 100.00
EQUITIES AND LIABILITIES 30 JUNE. 2022 % 30 JUNE 2021 %
------------Rs. ‘000’--------- ------------Rs. ‘000’--------
Share capital & reserves 15,254,706 35.03 13,940,630 38.33
Non-current liabilities
Long-term finances 4,820,914 11.07 4,820,910 13.26
Long-term provision 154,463 0.35 166,963 0.46
Related party loan 341,333 0.78 341,333 0.94
Deferred taxation 641,128 1.47 213,003 0.59
Deferred liability 369,916 0.85 309,193 0.85
Lease liabilities 72,416 0.17 84,963 0.23
Government grant 170,641 0.39 925 0.00
6,570,811 15.09 5,937,290 16.33
Current liabilities
Trade and other payables 6,238,326 14.32 5,077,126 13.96
Contract liabilities 975,994 2.24 499,708 1.37
Unclaimed dividend 5,610 0.01 5,718 0.02
Accrued Interest 521,139 1.20 267,271 0.73
Short term finance - secured 12,573,272 28.87 9,474,081 26.05
Current portion of long term finance 1,353,626 3.11 1,129,289 3.11
Current portion of government grant 42,643 0.10 12,494 0.03
Current portion of right of use 14,351 0.03 22,854 0.06
49.88 16,488,541 45.34

TOTAL EQUITY AND LIABILITIES 100.00 36,366,461 100.00

 CASH FLOW STATEMENT
30 JUNE. 2022 30 JUNE. 2021

Cash generated before working capital changes 4,799,195 3,591,957

Cash (used) / generated from operations 555,306 4,879,330
Income taxed paid (631,537) (437,141)
Gratuity paid (27,871) (36,236)
Finance cost paid (2,043,559) (1,948,293)
Long term deposits and loans – net (51,644) (17,387)
Net cash (used) / generated from operating activities (2,199,305) 2,440,273

Fixed capital expenditure (2,158,142) (1,273,141)

Addition to intangible assets (891) (3,039)
Proceeds from sale of operating assets 21,112 130,028
Net cash used in investing activities (2,137,921) (1,146,152)

Dividend paid (108) (272)

Short-term financing – net 4,127,741 (1,678,960)
Long-term financing – net 424,205 (289,711)
Long term investment 1,000 -
Lease rental paid (30,271) (26,644)
Net cash generated from / (used in) financing activities 4,522,567 (1,995,587)
Net increase in cash and cash equivalents 185,341 (701,466)
Cash and cash equivalent at the beginning of the year (1,845,683) (1,144,217)
Cash and cash equivalents at the end of period (1,660,342) (1,845,683)
 RATIO ANALYSIS
UoM FY 22 FY 21
PROFITABILITY RATIOS
Gross profit ratio Percentage 11.16% 11.58%
Net profit to sales ratio Percentage 2.28% 3.49%
Return on equity Percentage 8.70% 9.80%
INVESTMENT/ MARKET RATIOS
Earning per share Times 4.46 4.61
Interest cover Times 1.97 1.90
TURNOVER RATIOS
Total asset turnover Times 1.34 1.08
Fixed asset turnover Times 2.70 1.95
LIQUIDITY RATIOS
Current ratio Times 1.00 : 1 0.97:1
Quick / acid test ratio Times 0.49 : 1 0.60 : 1
Debtor turnover Days 38 51
Break value per share Rupees 51.36 46.94
CAPITAL STRUCTURE RATIOS
Long-term debt / equity ratio Times 0.40 : 1 0.43 : 1
Financial leverage ratio Times 1.49 : 1 1.34 : 1
 SCRAP COST – 4TH QUARTER FY 22 AND 3RD QUARTER FY 22
SCRAP (CNF-$)

600

Rupees per MT
553

4th Quarter FY 22 3rd Quarter FY 22

USD VS PKR SCRAP PURCHASE COST (LANDED)

121,338
193
Rupees per MT

Rupees per MT
178
108,521

4th Quarter FY 22 3rd Quarter FY 22 4th Quarter FY 22 3rd Quarter FY 22

BILLET COST – 4TH QUARTER FY 22 AND 3RD QUARTER FY 22

BILLET COGM

149,458

Rupees per MT
136,127

4th Quarter FY 22 3rd Quarter FY 22

Axis Title

BILLETS FOH

25,000
Rupees per MT

20,000
15,000
10,000
5,000
-
 REBAR COST – 4TH QUARTER AND 3RD QUARTER FY 22
BILLET CONSUMED REBARS COGM

168,788
156,525

Rupees per MT
Rupees per MT

148,440
140,281

4th Quarter FY 22 3rd Quarter FY 22 4th Quarter FY 22 3rd Quarter FY 22

 PROVINCE WISE SALES

FY 22 FY 21

4.12% 5.67%
6.22% 4.72%

28.87%

31.88%
57.73%
60.79%

Sindh Punjab KPK Baluchistan

 PRODUCTION AND CAPACITY UTILIZATION

PRODUCTION QUANTITIES CAPACITY UTILIZATION

400,000
Capacity

SRM
350,000
Production
300,000

250,000 Capacity

DRM
200,000
Production
150,000
Capacity

SMS
100,000
Production
50,000

- - 100,000 200,000 300,000 400,000 500,000 600,000

FY 22 FY 21
FY 22 FY 21
SMS DRM SRM

SMS DRM SRM SMS DRM SRM

QTY -FY 22 (MT) 380,817 264,391 106,178 FY 22 63% 62% 59%
04% 03% 08%
QTY - FY 21 (MT) 366,400 257,809 98,507 FY 21 61% 61% 55%
 FOREIGN EXCHANGE RATE

250

205
197
200 185
178 177 176 180
169 173 173
161 165
Rupees Per USD

150

100

50

0
Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22
 KIBOR %
14.00%

12.00% 12.68%
12.08%
11.36%
10.00%
10.28% 10.45%
9.83%
8.00%
8.38%
7.92%
7.45% 7.39% 7.32% 7.54%
6.00%

4.00%

2.00%

0.00%
Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22

MP 7.25%

MP 8.75% MP 9.75% MP 12.25% MP 13.75%

Thank you
 Variance reasons QoQ

Quantity variance of 10,152 MT 4Q Vs 3Q.

1) Regime change causing political unstability giving rose to uncertainties among business communities.
2) Rising CAD resulting in local inflation and increasing interest rate
3) Slow down in economic growth and liquidity.

It is pertinent to note that 4th quarter has historically being the best quarter in terms of quantity generally constitute 33% of entire year
sale which was adversely affected this year due to reasons above