Hifsa Raja

Crescent Cotton Mills Limited’s (CCM) revenue decreased slightly to Rs1.54 billion in the first quarter of the ongoing fiscal year 2022-23 (1QFY23) from Rs1.65 billion over the same period of last fiscal. The company’s gross profit also declined to Rs144 million in this quarter compared to Rs232 million in 1QFY22.

However, the gross profit in the 1QFY23 was much higher than Rs48 million in 4QFY22. The net profit in 1QFY23 stood at Rs12 million, which was way down from Rs120 million in 1QFY22. However, the net profit in this quarter was much higher compared to a net loss of Rs34 million in 4QFY22. The net profit margin and earnings per share margin in 1QFY23 remained the lowest compared to the previous quarters. This drop in net profit margins and EPS was not a good sign for investors.

The reason behind the drop in profitability was the devastating flooding that struck Pakistan in July-August last year, affecting the country’s cotton crop and exports. The flooding would further worsen cotton scarcity this year, keeping cotton prices elevated in the months to come.

Crescent Cotton Mills Limited’s revenue increased to R7.11 billion in FY22 from Rs5.4 billion in FY21. However, the company’s net profit decreased to Rs249 million in FY22 from Rs321 million in FY21.The gross profit margin decreased to 10.21% in FY22 from 13.42% in FY21. The net profit margin and EPS also dropped in FY22 as compared to FY21.

The companies that have been considered the competitors of Crescent Cotton Mills Limited are Crescent Fibres Limited, Shahtaj Textile Limited, Shahzad Textile Mills Limited and Zephyr Textiles Limited. Shahzad Textile Mills Limited has the largest market capitalisation of Rs907.4 million followed by Shahtaj Textile Limited with a market value of Rs814.3 million. Crescent Cotton Mills Limited is the third one with a market value of Rs770.3 million.

Company Profile

Crescent Cotton Mills Limited deals in yarn, cloth and other goods and fabrics made from raw cotton and synthetic fibers. The company's segments include spinning, to produce yarn using natural and artificial fibers; weaving, to produce greige fabric using yarn; processing and home textile, to process greige fabric for production of printed and dyed fabric, and manufacturing of home textile articles. 

Credit: Independent News Pakistan-WealthPk