Nishat Mills Limited, Pakistan-based textile manufacturer, is losing profitability. Despite managing a 3 per cent growth in its top line year-on-year, the company’s gross profit was lower by 15 per cent for the nine months ended FY 2017, whereas the bottom line decreased by 13 per cent. A major reason for this was due to a poor third quarter.
The third quarter of Nishat Mills was a combination of a significantly higher distribution cost (up 24 per cent) and lower other income (down 32 per cent). The net profit for the quarter was almost half of what it was a year back. Up until now, the company’s significant other income had been showing growth in the bottom line.
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It is worth noting that according to the half-year Director’s Report, the profitability of Nishat Mills has been majorly hit due to an increase in minimum wage, fuel costs and, importantly, cost of raw materials. Besides, the company had been receiving lower rates from its weaving, dyeing and home textile segments.
