Lahore May 6 2022: The Board of Directors of Azgard Nine Limited (ANL), in its meeting held on April 28, 2022, has accorded approval for opening of liaison office in Bangladesh, according to company filling to the exchange.
This will help the Company to increase business relationships in Bangladesh and grow its direct business/sales especially of fabric/denim . However, opening of liaison office will be subject to required regulatory approvals.
During the period form July 2021 to March 2022, a bid pertaining to spinning unit located at Alipur road, Muzaffargarh has been finalized by the agent banks, as part of the scheme of arrangement. A part of the advance proceeds that were payable under the accepted bid have been received.
During this nine months’ period, the sales of the Company have increased by 50% as compared to the same period of the previous year. Operating profit of these nine months closed at Rs. 1,449.53 million, an increase of more than 26% when compared with the operating profit of same period last year. The Company has been able to achieve a after tax profit of Rs. 661.88 million for the nine months of the year 2021-22 as compared to profit of Rs. 152.58 million during the same period last year.
There has been some resurgence of demand subsequent to COVID-19. At the moment, the whole textile industry is in a growth phase primarily on the back of higher prices but not so much increased volumes. However, the increase in all types of input costs such as raw materials, energy, freight etc. have not allowed profitability margins to be maintained in the downstream industries. Spinning margins have on the other hand benefitted greatly. The prices and margins of export market are still under pressure. Margin compression can be observed from our numbers.
Recently certain policy changes have also had a negative impact on the Company. The gas price at captive connection has increased from 6.5 USD/MMBTU to 9 USD/MMBTU w.e.f. November 15, 2021. Moreover, due to low pressure of gas in January and February of 2022, we could not fully utilize our gas engines. This meant intermittent electricity supply, loss of production and thus loss of profit. The ECC and the Federal cabinet has already approved the new textile policy that includes DLTL scheme – duty drawback on local levies and taxes. However, official notification is still pending. Consequently, the Company has not recognised the expected positive effect of DLTL on its income as it was able to do in previous periods.
The main business of the Company is the production and marketing of Denim focused Textile and Apparel products, starting from yarn to retail ready goods.
