Gul Ahmed Textile, one of Pakistanâ€™s largest composite textiles mills making good gain. Its earnings are up by 233% for the six month period ending December 2013, a revenue of Rs.570 million after tax was posted against Rs171 million for the corresponding period of the previous year.
Second quarter (October-December 2013) of the current fiscal year (FY2013-14) has been exceptional for the company, which saw an earning of Rs414 million, up 294% compared to Rs105 million in the corresponding quarter previous year.
Gul Ahmed Textile Mills Executive Director Ziad Bashir said that they want to do better this year and achieve their targets like other companies.
According to him, there is no major hurdle for the textile sector this year but this industry has many variables (cotton prices, power availability) and one cannot predict too much.
Gul Ahmed exports a large portion of its total to Europe and is expected to benefit from the GSP Plus Scheme.
Due to better economic growth in Europe, sales of textile products have jumped in the last six months, which is benefitting Pakistani companies. Moreover, the depreciation of the Pakistani rupee against the dollar in recent months has also boosted the sales of Pakistani textile products.
The company returned to profitability in FY13, with an earning of Rs702 million compared with a loss of Rs240 million in FY12. Keeping aside the FY12 loss, Gul Ahmed earned a noteworthy profit of Rs1.2 billion in FY11 and Rs478 million in FY10 due to domestic sales and export markets.
Being an integrated textile mill, Gul Ahmed produces finished products from yarn â€“ a raw material â€“ and directly retails them with its own store chain â€˜Ideasâ€™ that was launched in 2003.
The textile companies are expected to make more efforts this year to make the most of the GSP Plus scheme.
The profit margin of the company jumped from 16% to 19%, while its sales have also increased in the first half of FY14, while on the second half of the textile companies usually tends to be better commented JS Global Capital analyst Bilal Qamar.
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