Karachi: Dadex Eternit Ltd. is grappling with financial difficulties as reflected in its recent corporate briefing session, where it reported a significant downturn in its financial performance from 2020 to 2024. The company’s sales figures have shown a continuous decline, dropping from 2,374.11 million rupees in 2020 to 1,119.26 million rupees in 2024. According to information available from the Pakistan Stock Exchange (PSX), this decline is coupled with persistent operating losses, which stood at 145.40 million rupees for 2024, compared to a profit of 152.01 million rupees in 2021.
The profit after taxation has also been on a downward trajectory, with a loss of 350.40 million rupees in 2024, which is a slight improvement from the previous year’s loss of 420.03 million rupees. Earnings per share have correspondingly been negative, at -32.55 rupees in 2024, reflecting ongoing challenges in profitability.
Profitability ratios reveal a decline in gross profit margin from 9.90% in 2020 to 5.64% in 2024. Operating profit margins have also remained negative, with a decrease from -6.69% in 2020 to -12.99% in 2024. Return on equity has further deteriorated, reaching -68.45% in 2024, emphasizing the company’s struggle to generate returns for its shareholders.
Liquidity ratios paint a challenging picture, with the current ratio declining from 0.69 in 2020 to 0.32 in 2024, and the quick ratio dropping from 0.56 in 2020 to 0.21 in 2024, indicating potential liquidity issues.
The company’s inventory turnover days have shown improvement, decreasing from 105 days in 2020 to 67 days in 2024. However, the receivables collection period remains relatively consistent, dropping slightly from 23 days in 2021 to 18 days in 2024. The payables payment period has increased significantly, from 96 days in 2020 to 226 days in 2024, suggesting challenges in managing short-term liabilities.
The CEO highlighted the impact of volatile raw material prices and exchange rate fluctuations on the company’s performance. A revival in growth, according to the company, will depend on the government’s implementation of structural reforms, fiscal improvements, interest rate reductions, and liquidity stimulus.