Millat Tractors Limited (PSX: MTL) has announced its FY25 result, where in the company recorded unconsolidated profit of Rs. 6.4 billion (EPS of Rs. 31.94), down 38% over the previous year.
In a report, brokerage house Topline Securities attributed the decline in earnings to lower tractor sales which were down by 39% YoY from 30,620 units in FY24 to 18,580 units in FY25.Topline pointed out that in FY25, the Punjab Government’s Green Tractor Scheme provided a one- off boost to the company’s sales; otherwise, sales would have been even lower.
Gross margins increased by 320bps YoY to 26.61% in FY25 as compared to 23.42% in FY24.On quarter basis, company recorded profit after tax (PAT) of Rs. 1.4 billion (EPS of Rs. 6.89) in 4QFY25, down 25% YoY and 1% QoQ.
Net sales of the company decreased by 44% YoY and 2% quarter on quarter (QoQ) in 4QFY25, due to lower tractor sales. Millat’s tractor sales dropped by 43% YoY and 8% QoQ to 4,062 units in 4QFY25, compared to 7,110 units in 4QFY24 and 4,411 units in 3QFY25.
In 4QFY25, gross margins came at 25.83% up by 110bps YoY while down 250bps QoQ. Distribution expenses decreased by 2% YoY and 25% QoQ due to decrease in tractor sales.Finance cost of the company increased by 14% YoY in 4QFY25 due to increase in short term borrowing.
Effective tax rate of the company reported at 21% in FY25 against 39% in FY24. While, in 4QFY25, company recorded effective tax rate of 28% vs 38% in 3QFY25 and 46% in 4QFY24.Alongside the results, the company announced a dividend of Rs. 15 per share in 4QFY25, bringing FY25 dividend to Rs60 per share.
