Himalayan Distillery Q1 report: why profit drops sharply?

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Rabindra Bhattrai
Rabindra Bhattarai is a respected finance expert, widely known for his contributions to Nepal’s capital market through research, and authorship on stock market investment and financial...
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Himalayan Distillery Limited has published its unaudited financial report for the first quarter of the current fiscal year. According to the report, the company’s net profit has fallen sharply by 54.61%, reaching only Rs. 9.02 crore. In the same period last year, the company had earned a net profit of Rs. 19.88 crore.

The main reason behind this decline is a drop in sales revenue and a rise in operating expenses.

During the first quarter, the company’s net sales income decreased by 27.63% to Rs. 1.07 billion, compared to Rs. 1.48 billion in the same period last year. Operating profit also fell from Rs. 26.46 crore to Rs. 12.57 crore.

Employee expenses rose from Rs. 6.08 crore to Rs. 8.09 crore. Administrative and other expenses increased from Rs. 2.18 crore to Rs. 3.23 crore, while selling and distribution expenses went up from Rs. 7.04 crore to Rs. 12.19 crore. Financial expenses also rose slightly from Rs. 3.26 lakh to Rs. 5.96 lakh.

The company’s paid-up capital stands at Rs. 3.07 billion, and its reserve fund has reached Rs. 1.18 billion. Total current assets are valued at Rs. 3.75 billion, while total current liabilities amount to Rs. 644.5 million.

By the end of the review period, the company’s earnings per share (EPS) had dropped to Rs. 11.75. The net worth per share is Rs. 138.40, the price-to-earnings (P/E) ratio is 111.52 times, and the liquidity ratio stands at 5.83%.

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Rabindra Bhattarai is a respected finance expert, widely known for his contributions to Nepal’s capital market through research, and authorship on stock market investment and financial management.
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