Avanceon Ltd, a leading innovator in the automation industry, announced its consolidated financial results for the first quarter ended March 31st, 2020.
The company has reported a massive increase of 161.31% in its profits in the first quarter of 2020. It has reported a profit of Rs. 384.96 million as compared to Rs. 147.32 million earned in the same period last year.
The increase in profits was seen due to a surge in sales and other operating income. The sales during the quarter were reported at Rs. 968.40 million, translating into an increase of 40% as compared to Rs. 697.07 million in the corresponding period of the last year.
There was a 45% increase in the cost of revenue as it was posted at Rs. 630.32 million as compared to Rs. 433.59 million. This took the gross profit to Rs. 338.08 million as compared to Rs. 263.49 million recorded in the same period last year.
The administrative and selling expenses saw an increase of 36% to Rs. 152.04 million as compared to Rs. 111.83 million. However, the impact of this got somehow negated by the decline in other operating expenses by 36%.
Other income saw an unprecedented increase of 840%. It surged by 8.4x to Rs. 227.15 million as compared to Rs. 24.17 million.
Finance cost was reduced to Rs. 25.15 million, down by 3% as compared to Rs. 25.81 million. Earnings per share of the company increased to Rs. 2.00 as compared to Rs. 0.77.
According to Avanceon’s recently released annual report for the year 2019, the company mentioned delays in revenue recognition in the 1st and 2nd Quarter 2020 due to COVID-19.
“We faced one-month complete shutdown in last month of 1st Quarter 2020 which impacted our order generation and revenue recognition around 80%. Definitely being a technology company our ability to work remotely is tremendous which enable us to execute projects, deliver revenue even in situation accrued due to COVID-19 Pandemic, this has anyway been the cornerstone of our business plan,” added the report.
It further added that some of their current projects executions, commercial approvals, and also relevant inflows may directly and indirectly impacted by the COVID-19 pandemic issue.
The company in its annual report warned that the outbreak of Novel Coronavirus (COVID-19) continues to progress and evolve. Therefore, it is challenging now, to predict the full extent and duration of its business and economic impact. The outbreak of COVID-19 has had a distressing impact on overall demand in the global economy with a notable downgrade in growth forecasts.
However, it is expected to save around Rs. 17 million and Rs. 12.5 million in fixed costs in Pakistan and the Middle East respectively during this period because of working from home.
“Our company is committed to paying full salaries to all of our regular and contractual staff and no staff will be fired or terminated during this period of COVID-19,” stated the report.