Bannu: In a significant financial turnaround, Bannu Woollen Mills Limited reported a net profit percentage of 34.36% for the fiscal year ending June 30, 2024, compared to a net loss of 33.03% the previous year. This improvement came amidst a substantial decrease in production volumes and a reduction in operating profit.
The company held a corporate briefing session to detail its financial performance. The company's production of finished goods fell sharply from 1,217,876 meters in 2023 to 894,715 meters in 2024. The cost of sales as a percentage of revenue slightly decreased to 73.97% from 74.31% the previous year, while capacity utilization in spinning increased to 65% from 56%.
Despite the production decline, Bannu Woollen Mills exhibited strong financial metrics. According to information available from the Pakistan Stock Exchange (PSX), the debtor turnover ratio more than doubled from 3.56 to 7.07, indicating improved efficiency in collecting receivables. The cash conversion cycle, however, increased from 356 days to 763 days, suggesting challenges in inventory and payables management.
The company's total assets remained stable, with current assets increasing from 1,111.79 million rupees in 2023 to 1,150.81 million rupees in 2024. Notable increases were seen in stores and spares stock, advances to employees, and sales tax refundable, which grew by 34.90%, 41.57%, and 100.00%, respectively.
The solvency ratios indicated a mixed performance. The current ratio decreased slightly from 2.11 to 2.10, while the quick ratio fell from 0.09 to 0.64, and the cash ratio saw a marginal decline from 0.09 to 0.01. The total debt to equity ratio improved to 0.24 from 0.28, reflecting a more favorable debt position.
Profit and loss ratios showed a gross profit percentage of 26.03%, up from 25.69% the prior year. However, the operating profit percentage declined from 10.38% to 6.57%. The effective tax rate also increased to 33.73% from a negative 31.73%.
The price to earnings ratio improved to 0.83 from a negative 0.62, indicating better market valuation. Profit or loss per share saw a significant improvement from a loss of 36.10 rupees to a profit of 32.21 rupees.
The company's key financial variances were attributed primarily to changes in raw material costs, salaries, and power expenses. Raw materials saw a reduction of 86,816,000 rupees, while salaries increased by 36,389,000 rupees and power and fuel costs rose by 30,701,000 rupees.
Bannu Woollen Mills Limited's financial performance presents a complex picture of a company navigating through production challenges while achieving notable financial gains.