MANAMA: Trafco Group has achieved a net profit during the second quarter ended June of BD233,000 compared with BD381,000 during the second quarter of last year, showing a decrease of 39 per cent.
A net profit of BD108,000 realised from the sale of investments was added to shareholders equity to comply with the new IFRS accounting standard.
The group achieved a total comprehensive income related to Trafco shareholders during the second quarter of BD817,000 compared with BD 409,000 of last year, an increase of 100pc.
The group also achieved an operating profit (including minority shares) in the second quarter of BD499,000 compared with BD680,000 in the second quarter of last year, with a decrease of 27pc.
With regards to revenue, the group achieved BD9.4m during the second quarter, compared with BD10m in the second quarter of last year, a decrease of 6pc.
Earnings per share during the second quarter were three fils compared with five fils in the second quarter of last year.
Trafco Group chairman Ebrahim Zainal said the drop in sales and profitability in the second quarter of the year in comparison to the second quarter of last year can be attributed to the general decline in the market due to increased raw material cost globally, affecting the gross margins apart from the general increase of overheads.
Mr Zainal
The application of the new accounting standard also had some reflection on the P&L account.
Group chief executive S Sridhar said the group achieved a net profit for the half year of BD1.1m compared with BD 1.2m in the previous year, a decrease of 8pc.
Mr Sridhar
The group achieved a total comprehensive income related to Trafco shareholders during the half year of BD2.1m compared with BD1.2m last year, an increase of 75pc.
The group also achieved an operating profit (including minority shares) during the half year of BD933,000 compared with BD1,306,000 of last year, with a decrease of 29pc.
This is apart from the profit realised from the sale of investment which was not reflected in the P&L account as indicated above.
With regard to revenue, the group achieved BD19.3m for the half year, compared with BD20.1m last year, a drop of 4pc.
Earnings per share were 14 fils compared with 16 fils last year.
The total shareholders’ equity (excluding minority interests) for the half year was BD25m compared with BD25m as end of last year, which is the same as last year.
Total assets for the half year reached BD45m compared with BD40m as of last year end, an increase of 13pc.
The increase is partly due to creation of a new asset category under ‘right-of-use assets’ as per new IFRS relating to the group’s leases for land, buildings and other lease-hold assets.
The drop in the net profit for the half year in comparison with last year was due to general decline in the market leading to overall decline in the profitability of the parent and subsidiary companies with the increase in raw material prices and cost of fuel and energy and increased production cost.
Further the group’s overall general and administration expenses including rentals have gone up affecting the net profit though the parent company earned dividends on the share portfolio.
As per the new IFRS requirement the group chose the option of accounting the profit on sale of investments under other comprehensive income as against the practice of taking the same to statement of income, which otherwise would have increased the earning per share.
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