GATM: 1HFY17 EPS to clock in at PKR0.83, down 42%YoY - By BMA Research

<p></p><ul><li><span style="font-size:medium;">We expect Gul Ahmed Textile Mills Limited (GATM) to report earnings of PKR246mn (EPS: PKR0.83) in 1HFY17 compared to PKR423mn (EPS: PKR1.42) in the corresponding period last year, depicting a decline of 42%YoY. The decline in earnings can be attributed to i) 4ppsYoY contraction in gross margins owing to higher procurement price of cotton, ii) 17%YoY higher distribution expenses and iii) 6%YoY increase in finance cost on account of increased borrowing.</span></li></ul><ul><li><span style="font-size:medium;">The decline is expected on the back of i) 4ppsYoY contraction in gross margins, ii) 37%YoY higher finance cost and iii) higher taxation expense vis-&agrave;-vis a reversal of PKR12mn last year. The topline, however, is expected to post an increase of 20%YoY backed by improvement in ...