ISLAMABAD: The gross profit of First Prudential Modaraba increased 63.01% to Rs39 million in the first half of the ongoing financial year 2022-23 (1HFY23) from Rs24.3 million over the same period of the previous year, reports WealthPK.
Similarly, the operating profit increased by a staggering 127.71% to Rs21.6 million in 1HFY23 from Rs9.48 million in 1HFY22.
The finance cost of First Prudential Modaraba stood at Rs4.3 million in 1HFY23, registering an increase of a huge 398.6% over the same period of the previous fiscal.
The profit-before-tax increased 79% to Rs13.9 million 1HFY23 from Rs7.7 million in 1HFY22
The after-tax profit jumped 81% to Rs12.7 million in 1HFY23 from Rs7.02 million in 1HFY22.
Earnings per share and EPS growth
The company’s earnings per share (EPS) have been fluctuating over the past four years. EPS was Rs0.03 in 2019, but decreased to -Rs0.06 in 2020 before increasing back to Rs0.11 in 2021 and further going up to Rs0.22 in 2022.
The EPS growth rate of the company has been quite volatile over this period. It was 113.64% in 2019, but dropped to -300% in 2020 (which means the EPS was negative in 2020 compared to the previous year), but then increased significantly to 283.33% in 2021, and again plunged to 100% in 2022.
Enterprise value
Data shows that the enterprise value (EV) of the company increased from Rs0.06 billion in the first quarter of FY23 to Rs0.15 billion in the second quarter. The increase in the enterprise value is due to the merger of First Prudential Modaraba, First Pak Modaraba, and KASB Modaraba. This merger will result in lowering operational expenses and mitigating the adverse effects of taxation applicable to the modaraba industry. The modaraba’s economic size will also enable it to increase its transaction exposure size and leverage its operations in order to expand its portfolio.
Industry comparison
First Prudential Modaraba’s competitors include Pak-Gulf Leasing Company Limited, OLP Modaraba, KASB Modaraba and SME Leasing Limited.
The market capitalisation of First Prudential Modaraba is Rs130 million. As the above table shows, First Prudential Modaraba has a lower market capitalisation than OLP Modaraba, which has a market cap of ₨570.9m, followed by Pak-Gulf Leasing Company Limited with a market cap of Rs134.7 million. However, First Prudential Modaraba has a higher market cap than KASB Modaraba and SME Leasing Limited.
Profit or loss over the years
The company’s gross profit declined from ₨69.9 million in 2019 to ₨49.6 million in 2020 and further to ₨45.5 million in 2021. However, the company was able to mark a turnaround, with the gross profit increasing to ₨61.6 million in 2022.
In terms of profitability, the company had negative pre-tax profits in 2018 and 2020, indicating the firm was operating at a loss in those years. However, it achieved positive before-tax profit in 2019, 2021 and 2022.
Similarly, the company had negative after-tax profits in 2018 and 2020 but was able to generate positive profits in 2019, 2021 and 2022.
