Karachi, April 27, 2020: Millat Tractors Limited (MTL) announced earnings of Rs553 million for 3QFY20 (EPS Rs11.09), down by 42 percent YoY.
The decline in earnings is largely due to fall in unit sales by 28 percent YoY and lower Gross Margin (down 1.92 points YoY).
However, earnings improved by 22 percent QoQ on the back of (1) 22 percent QoQ higher sales due to the start of the harvesting season and (2) improvement in gross margins by 1.45 points QoQ, which resulted in higher than expected result announcement.
Finance cost of the company has increased massively by 4.8x YoY as the company had to increase short term borrowings to manage its working capital requirements due to higher inventory levels.
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As of latest balance sheet numbers, short term borrowing stands at Rs4.15 billion while stock in trade is amounted at Rs5.05 billion.
Effective tax rate of the company has clocked in at 27 percent vs. 21 percent in the previous quarter.