Service GlobalFootwear Posts 6% Profit Growth in First Half of 2024

Service GlobalFootwear Limited (PSX: SGF) announced its 1HCY24 financial result with an unconsolidated profit after tax of Rs. 461 million, up 6 percent YoY. On a quarterly basis, the unconsolidated earnings clocked in at Rs. 75 million, plunging by 59 percent YoY, during 2QCY24. Topline during 1HCY24 clocked in at Rs. 8.287 billion, displaying a jump of 12 percent YoY in contrast to Rs. 7.417 billion in SPLY, amid PKR depreciation and an increase in exports, according to Arif Habib Limited. During 2QCY24, sales declined by 2 percent YoY | 18 percent QoQ, due to suppressed demand. During 1HCY24 gross margin arrived at 16.5 percent, down from 21.5 percent during SPLY mainly due to an increase in raw material and fuel costs. For the same reasons, gross margins posted a decline of 880 bps during 2QCY24, reaching 14.3 percent. Administrative expense rose by 18 percent YoY settling at PKR 178 million during 2QCY24, attributed to an increase in employees’ wages and salaries. Other income declined by 53 percent YoY to clock in at Rs. 105 million in 2QCY24, on the back of lower interest earned on diminishing long-term loans to the parent company. The share of profit from associates, amounting to PKR 230mn in 2QCY24, represents the stake adjusted (18.9 percent) profit after tax of Service Long March (SLM). The company booked effective taxation at 68.1 percent in 2QCY24 vis-à-vis 49.0 percent in 2QCY23. At the time of filing, SGF’s scrip at the bourse was Rs. 68.83, down 10 percent or Rs. 7.65 with 140,530 shares on Monday.