Karachi: Mirpurkhas Sugar Mills Limited has reported a substantial financial downturn for the fiscal year ending in 2024, with losses attributed to increased costs and reduced profitability. According to the financial statement presented, the company experienced a net loss after taxation of 2.22 billion rupees, a stark contrast to the profit of 943.36 million rupees recorded in the previous year.

The company's net turnover decreased to 7.78 billion rupees from 11.97 billion rupees in 2023, showcasing a decline in sales. This reduction in turnover was compounded by a rise in the cost of sales, which amounted to 11.15 billion rupees, up from 6.42 billion rupees the prior year. The resulting gross profit fell significantly to 819.88 million rupees from 1.36 billion rupees.

The financial results were further impacted by elevated distribution and administrative expenses, which increased to 264.82 million rupees and 319.40 million rupees, respectively. Other operating expenses were reported at 33.24 million rupees, contributing to a collective operating cost of 617.45 million rupees, marginally higher than the 612.37 million rupees recorded in 2023.

Other income for the company saw a sharp decline to 47.14 million rupees from 515.88 million rupees, directly affecting the operating profit, which dropped to 249.57 million rupees from 1.27 billion rupees. Finance costs surged to 1.86 billion rupees from the previous year's 1.12 billion rupees, further exacerbating the financial strain.

According to information available from the Pakistan Stock Exchange (PSX), Mirpurkhas Sugar Mills faced a significant loss in its share of profit from associates, reported at a loss of 652.47 million rupees compared to a profit of 911.71 million rupees in 2023. This shift played a crucial role in the company's pre-tax losses of 2.43 billion rupees.

The company also reported a taxation credit of 205.77 million rupees, in contrast to a tax expense of 104.04 million rupees the previous year. Despite this, the earnings per share plummeted to a loss of 39.17 rupees from a positive 16.43 rupees in 2023.

Financial indicators highlighted a decline in profitability ratios, with the gross profit ratio dropping to 6.85% from 17.52%, and a net loss to sales ratio of 18.56% compared to a profit of 10.79% in the previous year. The return on equity and return on capital employed were also negative, reflecting the overall financial challenges faced by the company.

Liquidity ratios revealed stability in the current ratio at 0.69 times, while the quick ratio slightly improved to 0.31 times from 0.21 times. Cash flow metrics indicated a marginal cash flow from operations to sales ratio of 0.05 times, with cash flow coverage ratio at 0.06 times, reflecting minimal liquidity to cover current liabilities.