Karachi, August 27, 2019: Packages Limited (PKGS) announced 2Q2019 consolidated loss of Rs413 million (LPS Rs4.9/share vs. EPS of Rs8.19 in 2Q018). The result came in below our expectations mainly on the back of higher operating expenses, loss on investment under
Operating cost of the company was up by 170 percent to Rs807 million owing the exchange losses after appreciation of US$ by 14 percent in 2Q2019.
Furthermore, the company has booked an impairment provision on its associates to the extent of Rs500 million, as per our channel check.
Investment income in 2Q2019 fell by 88 percent YoY to Rs230 million which is in-line with our expectations as dividend income from Tetra Pak remained absent.
Net sales were up 13 percent YoY during the outgoing quarter. We attribute this to higher sales from packaging and paper &
Financial charges increased significantly by 84 percent YoY owing to hike in policy rate and debt borrowings.
Effective tax rate of the company during 2Q2019 clocked in at 71 percent (vs. 37 percent in SPLY) owing to reversal of
Key risks for the stock includes BSPL’s higher cost of production higher than expected appreciation of US$ against
