⚡ Flash Summary
Century Paper & Board Mills Limited reports a challenging quarter with a net profit of PKR 13.295 million, a significant drop from PKR 147.269 million in the same quarter last year. Despite a slight increase in turnover to PKR 10,637.306 million, the company faced higher costs, particularly in finance, leading to a substantial decrease in operating profit. The company experienced a loss before income tax, highlighting the adverse impact of increased finance costs. The earnings per share also declined drastically to PKR 0.03 from PKR 0.37.
📌 Key Takeaways
- 📉 Net profit plummeted to PKR 13.295 million from PKR 147.269 million YoY.
- 📈 Turnover increased slightly to PKR 10,637.306 million from PKR 10,132.236 million YoY.
- ⚠️ Operating profit declined significantly to PKR 307.433 million from PKR 757.203 million YoY.
- 💸 Finance costs surged to PKR 282.997 million from PKR 510.188 million YoY.
- 📉 Loss before income tax reported at PKR (102.059) million compared to a profit of PKR 247.015 million YoY.
- 💸 Basic and diluted earnings per share decreased to PKR 0.03 from PKR 0.37 YoY.
- ⚠️ Cost of sales increased to PKR 10,057.842 million from PKR 9,101.275 million YoY.
- 📉 Gross profit decreased to PKR 579.464 million from PKR 1,030.961 million YoY.
- 📉 Cash generated from operations decreased significantly to PKR 2,547.547 million from PKR 503.247 million YoY.
- ⚠️ Net cash from operating activities declined to PKR 2,154.588 million from negative PKR (435.946) million YoY.
- 📉 Net cash used in investing activities increased to PKR (268.822) million from PKR (32.548) million YoY.
- ⚠️ Trade debts increased to PKR 6,446.595 million from PKR 5,378.407 million since June 30, 2025.
- 📉 Short-term borrowings decreased to PKR 5,567.415 million from PKR 7,094.892 million since June 30, 2025.
- ⚠️ Reserves increased slightly to PKR 9,411.563 million from PKR 9,398.268 million since June 30, 2025.
- ⚠️ Long-term financing decreased to PKR 1,940.621 million from PKR 2,298.013 million since June 30, 2025.
🎯 Investment Thesis
Based on the financial results, a SELL recommendation is appropriate for Century Paper & Board Mills Limited. The significant decline in profitability, coupled with high finance costs and decreased operating profit, raises concerns about the company’s near-term prospects. The earnings per share have dropped significantly and the financial risk profile is high. Therefore, the price target is PKR 15, reflecting the reduced earnings potential and increased risks, with a short-term horizon of 6 months. This target accounts for potential further declines in earnings and increased volatility.
Disclaimer: AI-generated analysis. Not financial advice.