Islamabad, Oct 17: Pak Elektron Limited Achieves 97% Profit Growth in Nine Months
Pak Elektron Limited (PAEL) announced its 3Q2024 result wherein it posted earnings of Rs. 448 million (EPS of Rs. 0.52) up by 7 percent YoY and down by 54 percent QoQ.
PAT for the 9th quarter of 2024 was Rs. 1.863 billion, up 97% year over year.
In a study published on Thursday, Topline Securities stated that lower-than-expected revenue was the reason for lower-than-expected earnings.
In 3Q2024, earnings increased by 7% YoY primarily as a result of higher net revenue and a reduced effective tax rate during the quarter.
The revenue for the third quarter of 2024 was Rs. 11.3 billion, up 4% YoY but down 35% QoQ. The Appliance and Power Division’s volumetric increase has been the main driver of YoY growth.
In contrast, the primary cause of the 3Q2024 revenue decline of 35% QoQ was seasonality. Recall that in 202024, the impact of increased volumetric sales throughout the summer was observed.
The effective tax rate in 302024 remained at 27 percent compared to 43 percent in 3Q2023 and 37 percent in 2Q2024. The effective tax rate for 9M2024 was 42 percent, as opposed to 45 percent for 9M2023.
After reaching 27.6 percent in 3Q2023 and 26.6 percent in 2Q2024, gross margins in 3Q2024 fell to 25.9 percent.
In 3Q2024, distribution costs climbed by 48% YoY to Rs. 776 million as a result of greater volumetric sales and the effect of inflation.
Revenues climbed by 97% year over year to Rs. 1.86 billion in 9M2024. A 35 percent YoY rise in revenue, driven by higher volumetric sales and higher average selling prices based on channel checks, is the primary driver of higher profitability.
According to channel inspections, the Power and Appliances divisions saw significant volumetric growth in 9M2024.
In comparison to 9M2023, gross margins in 9M2024 stayed at 26.5 percent.
In comparison to the 10-year average PE of 9.6x, PAEL is currently trading at 2024E/2025F PE of 8.4/5.6x.
