Home / Knowledge / News / Textiles / Grey cloth demand boosts Nishat Mills' Q1 bottom-line
Grey cloth demand boosts Nishat Mills' Q1 bottom-line
29
Nov '13
Nishat Mills – the flagship company of the Pakistan’s Nishat Group—is undeterred by the slowdown in Europe and USA as it continues to outperform the industry average profitability growth, backed by strong grey cloth sales and improved margins.

For the first quarter ended September 2013, the company’s profit after tax increased significantly by 47.89 per cent at Rs 1.57 billion as compared to the corresponding quarter of last year. The growth was also higher than average 40 per cent growth registered by Pakistan’s textile sector in Q1 FY14.

The net sales of the company grew by 4.81 per cent during the quarter, helped mainly by strong demand for grey cloth in Europe, China and other neighboring markets. While sales of both the processed textiles and garments divisions witnessed decline during the quarter, the weaving division performed remarkably well. The company’s Grey Cloth sales registered an increase of 20.33 per cent at Rs 3 billion as compared to Rs 2.5 billion in the year ago period.

On the other hand, the yarn division recorded a decline of 3.33 per cent in sales at Rs 3 billion followed by “Processed and Home Textile” division with a decline of 3.39 per cent in sales at Rs 4.9 billion. “Overall bearish sentiments are prevailing in international and domestic markets as further decrease in yarn prices is expected. Resultantly, it is generating selling pressure especially in local market. Moreover, rising cost of energy is an additional burden on us,” said the company in a statement.

Garments division witnessed a decline of 16.77 per cent in sales at Rs 1.1 billion. “The profitability of Garments division of the Company decreased in the first quarter of financial year 2013-14 primarily because of low sales in the US and EU regions,” said Nishat Mills in a statement.

The company managed to boost its gross profit margins with production efficiencies and better cost management. The gross profit margin increased from 15.74 per cent in the corresponding quarter to 18.41 per cent in the current quarter. Margins were also boosted by stable cotton prices and around 6 per cent rupee depreciation against the dollar during the quarter.

Decrease in finance cost by 10.76 per cent in the current quarter as compared to corresponding quarter in the last year through better working capital management and reduction in borrowing rates was also key contributor to the profitability, said Nishat Mills.

The company also sees bright future prospects for the country’s textile sector, citing the expectations of increased textile exports to the EU after grant of Generalized System of Preferences Plus (GSP-plus) status from the European Union (EU) in January 2014.

Fibre2fashion News Desk - India


Must ReadView All

Textiles | On 25th Sep 2017

SVP Group to build $300 mn spinning plant in Sohar

ShriVallabh Pittie Industries (SVP) Group, a diversified yarn...

Apparel/Garments | On 25th Sep 2017

Vietnam textile sector to gain if EU FTA gets ratified

Experts feel the Vietnam-European Union (EU) free trade agreement...

Courtesy: Business Wire

Textiles | On 25th Sep 2017

Invista to use ADN technology at joint project in France

Invista, a leading producer of chemical intermediates, polymers, and...

Interviews View All

Awen Delaval
Samatoa

'Natural fibres are appreciated for traditional authenticity'

Headhonchos
Indian fashion industry

Organic the first choice of any environment-conscious person

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

September 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search