Manufacturing sector firms earn Rs 2 billion profit; Shivam surges while several struggle

KATHMANDU: Companies listed under the manufacturing and processing group on the Nepal Stock Exchange earned nearly Rs2 billion in net profit during the first six months of the current fiscal year 2082/83.

According to published financial statements, 14 companies together reported a total net profit of Rs1.84 billion by the end of the second quarter. This is about 4.23 percent — or Rs74.7 million — higher than the same period last fiscal year, when their combined profit stood at Rs1.76 billion.

Strong gainers led by cement and agribusiness firms

During the review period, several companies posted sharp improvements in profitability.

Shivam Cement delivered one of the most dramatic turnarounds, with net profit jumping 528.52 percent to Rs357 million, up from just Rs56.8 million a year earlier.

Similarly, Shreenagar Agritech saw profit surge by 209.10 percent to Rs15.6 million. Sarbottam Cement also recorded strong growth, with profit rising 123 percent to Rs538 million. Himalayan Distillery reported a more modest but steady gain, with net profit increasing 10.73 percent to Rs448 million.

Profit & Performance Chart: Manufacturing & Processing Sector (Q2 2082)

Values in NPR (Nepali Rupees) unless specified otherwise.

Declines seen in spinning, consumer goods and panels

Not all companies performed well.

SY Panel Nepal’s profit plunged 71.14 percent, falling to just Rs7.87 million. Reliance Spinning Mills also saw profit drop 27.23 percent to Rs137 million. Unilever Nepal’s earnings slipped 9.81 percent to Rs439 million, while Nepal Lube Oil posted a 3.94 percent decline, with profit settling at Rs21 million.

Loss-makers return to profit, but some remain in the red

There was some relief for firms that had been struggling last year.

Sonapur Minerals, Bottlers Nepal (Balaju), and Bottlers Nepal (Terai) all moved back into profit this year. They posted net profits of Rs47.5 million, Rs31.2 million, and Rs135.4 million respectively, after recording losses in the previous year’s first half.

However, Om Megashree Pharmaceuticals, Sagar Distillery, and Ghorahi Cement are still operating at a loss. Their losses stand at Rs38.4 million, Rs26.1 million, and Rs264.9 million respectively as of mid-year.

Shivam Cement: Profit jumps despite flat revenue

Shivam Cement’s net profit surged to Rs357 million, compared to Rs56.8 million in the same period last year.

Interestingly, the company’s operating income remained almost unchanged at around Rs3.09 billion. However, improved cost management and non-operating income helped lift total profit to Rs654 million for the six-month period.

During this time, Shivam recorded:

• Cost of sales: Rs2.44 billion
• Administrative expenses: Rs121 million
• Selling and distribution expenses: Rs227 million

Profit before tax reached Rs406 million.

The company has paid-up capital of Rs5.59 billion and reserves of Rs3.53 billion. Earnings per share stand at Rs12.77, while net worth per share is Rs180.38.

Shreenagar Agritech: Revenue growth drives profit

Shreenagar Agritech reported net profit of Rs15.6 million, more than triple last year’s Rs5 million.

Operating income rose sharply by 60.27 percent to Rs878 million. Operating profit climbed 34.59 percent to Rs48.7 million, while total profit rose 20.22 percent to Rs114.7 million.

Costs also increased significantly:

• Cost of sales rose 68.71 percent to Rs763 million
• Administrative expenses increased 9.16 percent
• Staff costs rose 1.82 percent

The company’s paid-up capital stands at Rs1.63 billion, with reserves of Rs173 million. EPS is Rs1.03 and net worth per share is Rs110.62.

Sarbottam Cement: Strong profit expansion

Sarbottam Cement posted net profit of Rs538 million, more than double last year’s Rs241 million.

Operating income edged up slightly to Rs4.08 billion, but other income rose sharply, helping total profit reach Rs1.04 billion for the six-month period.

Despite a drop in cost of sales, administrative expenses surged and selling costs increased, pushing total expenditure up 24.52 percent to Rs526 million.

The company’s paid-up capital stands at Rs5.22 billion, with other equity of Rs4.30 billion. EPS is Rs20.61 and net worth per share is Rs188.92.

Himalayan Distillery: Stable performance

Himalayan Distillery reported profit of Rs448 million, up from Rs404 million last year.

Operating income rose 6.62 percent to Rs3.23 billion. With paid-up capital of Rs3.68 billion and reserves nearing Rs770 million, the company’s EPS stands at Rs24.31 and net worth per share at Rs120.87.

Mixed results across the sector

Elsewhere in the group:

• Nepal Lube Oil saw income grow 20 percent but profit slip slightly.
• Unilever Nepal recorded declines in both revenue and profit despite strong reserves.
• Reliance Spinning Mills posted lower revenue, lower operating profit, and falling EPS.
• SY Panel Nepal saw both income and operating profit shrink significantly.

Meanwhile, Sonapur Minerals delivered one of the biggest turnarounds, moving from heavy losses last year to strong operating profit growth this year, driven by an 84 percent rise in revenue.

Bottlers Nepal (Balaju) and Bottlers Nepal (Terai) also staged recoveries, with both revenue and operating profit improving compared to last year’s negative results.

Loss-making firms still under pressure

Om Megashree Pharmaceuticals doubled its revenue but rising expenses pushed it deeper into loss.
Sagar Distillery’s income jumped sharply, yet higher administrative, staff, and distribution costs kept it in deficit.
Ghorahi Cement recorded higher revenue but still reported a net loss, reflecting cost pressures across the cement industry.