Millat Tractors Limited, which is the largest tractor manufacturing company in the country, has announced its financial results for the 1st quarter of the fiscal year 2019-20.
The tractor manufacturer posted a consolidated profit of Rs. 456 million, down by 65.30% as compared with last year’s profit of Rs. 1.31 billion. The company reported sales of Rs. 5.41 billion, showing a decrease of 45.66% as compared to Rs. 9.99 billion in the same period last year.
Overall, tractor sales were down due to the slowdown in agricultural and economic growth in the country. This fall in revenue can be attributed to a decline in volumetric sales.
Rupee’s devaluation has made tractor pricing very competitive in the international market.
A major decline in profits was seen due to depressed sales of tractors owing to slow down in agriculture, reduced demand by CPEC and construction activities. 2019 does not seem like a good year for tractor players as the economic situation in the country is hurting farmers’ purchasing powers with inflation on the rise.
The company sold over 4829 units during the first quarter of FY 2019-20, showing a massive decline of 51.78% as compared with 10,014 units sold in the corresponding period last year.
The cost of sales of the company, however, went down by 43.28% to Rs. 4.32 billion as compared to Rs. 7.62 billion in the corresponding period.
Millat Tractors also witnessed a 73% decline in other income which was reported at Rs. 29.97 million compared to Rs. 111 million on account of lower dividend income from subsidiaries and interest income from bank deposits.
The finance cost of the company increased by more than 5 times as it was stated at Rs. 60.67 million. During the same period last year, it was reported at Rs. 9.7 million only. Millat paid 67.71% less tax compared to the previous year. It paid Rs. 456 million as taxes compared to Rs. 1.31 billion in the corresponding period.
Earnings per share of the company were reported at Rs. 10.30 down from Rs. 29.66.
MTL’s script at the bourse closed at Rs. 592.59, down by Rs. 12.00 or 1.98% with a turnover of 12,000 shares on Thursday.