PEL Increased It’s Growth Sales
Pak Elektron Limited, one of the leading home appliance makers in Pakistan, has posted a net profit of Rs1.62 billion in the quarter ended June 2017, 6.3% compared with earnings of Rs1.73 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
The company also announced an interim cash dividend of Rs1.50 per share or 15% for the quarter. Pak Elektron gave higher discounts offered by the company in the appliances segment, mainly on refrigerators, which affected its margins. Although gross revenues were up 14% year-on-year during the April-June quarter due to strong performance of the appliances segment, net revenues grew a mere 2% due to the discounts offered. Consequently, the company took a hit on its margins, which shrank 183 basis points to 30%. The company had a robust performance in the first half (Jan-Jun) of 2017 as earnings grew 21% YoY, primarily due to 29% increase in gross sales. This excellent growth in revenues was attributed to robust sales of appliances. Moreover, about 76% of the contribution to the gross revenues in the first half came from the company’s appliances division while the rest came from the power segment.
So the company has great future prospective and the accumulation of this item below 100.00 per share would consider ideal. However, it has great upside potential to reach 130.00 per share before December, 2017.