Despite higher sales, Interloop Limited (ILP), one of Pakistan’s largest textile exporters, saw its profit decline by over 18% to Rs16.46 billion during the year ended June 30, 2024.

The company registered a consolidated profit of Rs20.17 billion in the same period last year (SPLY), according to a notice sent to the Pakistan Stock Exchange (PSX) on Thursday.

Earnings per share (EPS) decreased to Rs11.78 in the period under review compared to Rs14.39 in SPLY.

The company also announced a final cash dividend of Rs2.5 per share i.e. 25% for the year ending June 30, 2024. This was in addition to an interim cash dividend of Rs2 per share i.e. 20%.

“Earnings are lower than industry expectations due to lower gross margins and higher financial costs,” said Topline Securities in a note.

During the period, the textile giant’s net sales surged by nearly 33% to Rs158.18 billion during FY24, compared to Rs119.2 billion recorded in the prior year.

Interloop saw its gross profit surge to Rs44.17 billion in FY24, up 11%. However, the company’s profit margin decreased to 27.9%, as compared to 33.4% in SPLY owing to higher costs.

Textile giant Interloop’s profit surges 115% to Rs10bn in 1HFY24

On the other hand, the company’s operating expenses rose nearly 32% year-on-year, to Rs17.05 billion in FY24.

The textile exporter’s ‘other income’ showed exponential growth of 324%, hitting Rs670.83 million in FY24, compared to Rs158.24 million in SPLY.

Its cost of finance ballooned to Rs10.16 billion in FY24, an increase of 84%. The increase comes as interest rates increased significantly during the year.

Consequently, profit before tax clocked in at Rs18.49 billion in FY24, as compared to Rs21.58 billion in SPLY, a decrease of over 14%.

Established in 1992, Interloop was listed on the country’s stock exchange in 2019.

The company is a vertically-integrated, multi-category company that manufactures hosiery, denim, knitted apparel and activewear. In addition, it produces yarn for textile customers. It is also one of the largest exporting firms in Pakistan and among the largest listed companies on PSX.

All of its plants are located in the province of Punjab.