Interloop : ILP | Interloop Limited Transmission of Quarterly Report for the period ended 31-03-2024

Quarterly Report For the 3rd Quarter ended March 31, 2024

OUR

MISSION

To be an agent of positive change for the stakeholders and community

by pursuing an ethical and sustainable business.

TABLE OF

CONTENTS

Company Information	02
Directors' Review Report	04
	10
Unconsolidated Condensed Interim Financial Statements
Unconsolidated Condensed Interim Statement of Financial Position	12
Unconsolidated Condensed Interim Statement of Profit or Loss	14
Unconsolidated Condensed Interim Statement of Comprehensive Income	15
Unconsolidated Condensed Interim Statement of Changes in Equity	16
Unconsolidated Condensed Interim Statement of Cash Flows	17
Notes to the Unconsolidated Condensed Interim Financial Statements	19
Consolidated Condensed Interim Financial Statements
Consolidated Condensed Interim Statement of Financial Position	34
Consolidated Condensed Interim Statement of Profit or Loss	36
Consolidated Condensed Interim Statement of Comprehensive Income	37
Consolidated Condensed Interim Statement of Changes in Equity	38
Consolidated Condensed Interim Statement of Cash Flows	39
Notes to the Consolidated Condensed Interim Financial Statements	41

Third Quarter Report

01

COMPANY INFORMATION

BOARD OF DIRECTORS

MUSADAQ ZULQARNAIN

Chairman / Non-Executive Director

NAVID FAZIL

Chief Executive Officer / Executive Director

MUHAMMAD MAQSOOD

Executive Director / Group CFO

FARWA HASNAIN

Independent Director

FATIMA ASAD KHAN

Independent Director

ROMANA ABDULLAH

Independent Director

TARIQ IQBAL KHAN

Independent Director

FARYAL SADIQ

Executive Director

JAHAN ZEB KHAN BANTH

Non-Executive Director

CHIEF FINANCIAL OFFICER

MUHAMMAD MAQSOOD

COMPANY SECRETARY

RANA ALI RAZA

HEAD OF INTERNAL AUDIT

JAMSHAID IQBAL

CHIEF INFORMATION OFFICER

MUHAMMAD YAQUB AHSAN BHATTI

LEGAL ADVISOR

HAIDERMOTA & CO.

AUDITORS

KRESTON HYDER BHIMJI & CO.

Chartered Accountants

AUDIT COMMITTEE

TARIQ IQBAL KHAN

Chairperson

ROMANA ABDULLAH

Member

JAHAN ZEB KHAN BANTH

Member

HUMAN RESOURCE & REMUNERATION COMMITTEE

FATIMA ASAD KHAN

Chairperson

NAVID FAZIL

Member

FARWA HASNAIN

Member

FARYAL SADIQ

Member

JAHAN ZEB KHAN BANTH

Member

NOMINATION COMMITTEE

MUSADAQ ZULQARNAIN

Chairperson

NAVID FAZIL

Member

MUHAMMAD MAQSOOD

Member

RISK MANAGEMENT

COMMITTEE

TARIQ IQBAL KHAN

Chairperson

MUHAMMAD MAQSOOD

Member

FATIMA ASAD KHAN

Member

ROMANA ABDULLAH

Member

02

ENVIRONMENTAL, SOCIAL & GOVERNANCE COMMITTEE

NAVID FAZIL

Chairperson

FARWA HASNAIN

Member

FARYAL SADIQ

Member

SHARE REGISTRAR / TRANSFER AGENT

CDC Share Registrar Services

Limited

KARACHI OFFICE:

Share Registrar Department

CDC House, 99-B, Block B,

S.H.C.H.S, Main Shahra-e-Faisal,

Karachi - 74400

Tel: [phone]

Fax: [phone]

LAHORE OFFICE:

Mezzanine Floor,

South Tower, LSE Plaza,

19-Khayaban-e-Aiwan-e-Iqbal, Lahore.

Tel: (92-42) - 36362061-66

BANKERS

• Allied Bank Limited
• Bank Alfalah Limited
• Faysal Bank Limited
• Habib Bank Limited
• Habib Metropolitan Bank Limited
• MCB Bank Limited
• MCB Islamic Bank Limited
• Meezan Bank Limited
• National Bank of Pakistan
• Standard Chartered Bank Pak Limited
• The Bank of Punjab
• United Bank Limited

E- COMMUNICATION

Website: www.interloop-pk.com

LinkedIn: Interloop Limited

Twitter: @InterloopLtd

Instagram: interlooplimited

YouTube: Interloop Limited

REGISTERED OFFICE

INTERLOOP LIMITED

Al-Sadiq Plaza, P-157,

Railway Road, Faisalabad, Pakistan Phone: [phone]

Fax: [phone]

Email : [e-mail]

Website: www. interloop-pk.com

CORPORATE OFFICE

INTERLOOP LIMITED

1 KM, Khurrianwala- Jaranwala Road,

Khurrianwala, Faisalabad, Pakistan

Phone: [phone]

Fax: [phone]

PLANT LOCATIONS

PLANT 1

1 KM Khurrianwala-Jaranwala Road, Khurrianwala, Faisalabad, Pakistan.

PLANT 2 & 4

7 KM Khurrianwala-Jaranwala Road, Khurrianwala, Faisalabad, Pakistan.

PLANT 3

8 KM, Manga-Raiwind Road, Distt. Kasur, Lahore, Pakistan.

PLANT 5

6 KM, By Pass Road, Khurrianwala, Faisalabad, Pakistan.

DENIM PLANT

8 KM, Manga-Raiwind Road,

Lahore, Pakistan.

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03

DIRECTORS' REVIEW REPORT

"The Board of Directors of Interloop Limited (Interloop or the Company) is pleased to present the Directors' review report together with the Unaudited Financial results of the Company for the nine months ended March 31, 2024." Furthermore, Board of Directors is pleased to inform that Interloop became the only textile firm added in the Morgan Stanley Capital International MSCI Frontier Market Main Index.

ECONOMIC AND INDUSTRIAL REVIEW

Pakistan's economic landscape continues to improve with each passing quarter, attributed to prudent policy management and the resumption of inflows from multilateral and bilateral partners. Pakistan has reached a staff-level agreement on the second review under Stand by Arrangement (SBA) to receive a final tranche of USD 1.1 billion. This would ease the pressure on the economy and pave the way for industrial growth. The Monthly Economic Indicator (MEI) by the Finance division surpassed the 3.0 % mark in February 2024. This improvement is supported by multiple sectors, including Large-Scale Manufacturing (LSM), crop production, agriculture credit disbursement, cement dispatches, and fertilizer production, supporting the GDP growth forecast of 2% for FY24 by the IMF.

Due to the macroeconomic challenges overall exports of the textile industry have remained stagnant, recording a YoY decline of 0.3%. However, the sector has shown growth for the last four consecutive months, resulting in total exports for nine months in FY'24 closing at USD 12.4 billion.

UNCONSOLIDATED FINANCIAL PERFORMANCE REVIEW

Interloop Limited demonstrated significant financial growth in the nine-month period ending March 31, 2024. The Company's net sales surged by 34.1% to Rs. 112,856 million, compared to Rs. 84,128 million in the same period of the previous year. The Gross Profit also reached Rs. 33,840 million, a 20.0 % growth from the corresponding period of the previous year. The management successfully maintained operational efficiency, contributing to a 15.9% growth in profit from operations to Rs. 22,133 million.

However, the gross profit margin declined by 3.5% to 30.0% in 9MFY24 from 33.5% in 9MFY23. The net profit margin declined by 5.2% from 16.8% in 9MFY23 to 11.7% in 9MFY24, mainly due to,initial startup losses of apparel master project during ramp up period, exchange loss of Rs. 773 million (9MFY23: Exchange gain of Rs. 8,193 million), and increase in average finance cost due to new borrowings at normal rates and repayment of subsidised loans. Outstanding total borrowing has also increased by PKR 6,014 Million. The Earnings per Share (EPS) stood at Rs. 9.39 per share compared to Rs. 10.11 per share.

The summarized un-audited unconsolidated financial results for the nine months ended March 31, 2024, as against March 31, 2023, are as follows:

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	Nine months ended March 31
	2024	2023	Variance
	Rs. in millions	%
Sales - Net	112,856	84,128	34.1%
Gross Profit	33,840	28,192	20.0%
Profit from Operations	22,133	19,103	15.9%
Net Profit	13,155	14,169	-7.2%
Gross Profit Ratio	30.0%	33.5%	-10.5%
Net Profit Ratio	11.7%	16.8%	-30.8%
Earnings per Share - Basic and Diluted (Rupees)	9.39	10.11	-7.2%

PKR in Million

120,000 112,856

100,000

84,128

80,000

60,000

40,000				33,840	28,192	22,133
20,000						19,103	13,155	14,169
0
		Sales	Gross profit		Profit from operatins	Net Profit
			Nine Months ended March 31, 2024		Nine Months ended March 31, 2023

CONSOLIDATED FINANCIAL PERFORMANCE REVIEW

Following is the summary of the consolidated financial performance of the group, providing a comprehensive view of the combined operations of its subsidiaries.

The group earned a consolidated revenue of Rs. 114,118 million, showing a 35.6% increase from the corresponding period of last year. However, due to exchange loss, increased working capital requirements and capitalization of the Apparel Master project, the net profit dipped by 1.3% from PKR 14,169 million ( EPS: Rs. 10.11 per share) to Rs. 13,987 million ( EPS 9.98 per share).

The summarized consolidated financial results for the nine months ended March 31, 2024, as against March 31, 2023, are as follows:

Third Quarter Report

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	Nine months ended March 31
	2024	2023	Variance
	Rs. in millions	%
Sales- Net	114,118	84,128	35.6%
Gross Profit	34,253	28,192	21.5%
Profit from Operations	22,968	19,103	20.2%
Net Profit	13,987	14,169	-1.3%
Gross Profit Ratio	30.0%	33.5%	-10.4%
Net Profit Ratio	12.3%	16.8%	-27.2%
Earnings per Share - Basic and Diluted (Rupees)	9.98	10.11	-1.3%

CURRENT AND FUTURE OUTLOOK:

Interloop Limited is committed to the triple bottom line approach, comprising planet, people, and prosperity, to lead towards sustainable growth. Despite several challenges faced by the textile sector, including supply chain challenges in the Red Sea, high-interest rates, volatile material prices, and soaring energy prices, the Company is well-poised to serve its global customer base. Interloop management diligently monitors the latest developments and implements proactive measures to ensure uninterrupted company operations.

The Company's commitment to environment and sustainable practices is exemplified by several key initiatives during Q3 FY-2024. The Company released its Sustainability Report 2023, outlining progress towards Vision 2025 goals and its "To Impact" purpose. A digital waste mapping program for enhanced recycling is implemented through a collaboration with Reverse Resources and Pakistan's National Textile University. Adherence to The Alliance for Water Stewardship (AWS) standard also underscores the commitment to responsible water use. Further, the "Interloop Regen Kapas" program was launched, involving 1,000 partner farmers, promoting sustainable cotton farming practices, improving soil health, reducing environmental impact, and enhancing livelihoods. These initiatives demonstrate Interloop's dedication to operating sustainably throughout its value chain.

Interloop Limited's Q3 FY-2024 CSR initiatives displayed a multifaceted empowerment, inclusion, and diversity approach. To enhance accessibility and employability for the deaf community, Interloop partnered with Connecthear to launch the first-ever 24/7 interpretation online desk and also launched a sign- language interpretation Google Application. Furthermore, women's empowerment remained the key focus. Interloop partnered with the Female Exclusive Training Institute (FETI) to provide skills-based training. Over 100 women have joined the workforce at the apparel plant as a result of this initiative. The Company also established a long-term endowment fund through the Interloop Welfare Trust

06

in collaboration with the Kashf Foundation to provide ongoing financial support for various women's empowerment projects. Additionally, the company actively supported women in sports by hosting the first-ever National Level Women's Championship in Faisalabad. Interloop has committed Rs 100 million for lifetime school education support in collaboration with The Citizens Foundation (TCF) to promote education and literacy. In addition to this, the Company has also announced the construction of two primary schools. These diverse initiatives demonstrate Interloop Limited's dedication to creating a positive and inclusive social impact.

ACKNOWLEDGEMENT

The Board expresses gratitude to valued shareholders, customers, financial institutions, and regulators for their enduring trust and support. The Board also commend the dedication and hard work of the Company's management and employees. The Board is confident that this spirit of commitment will endure in the years ahead.

For and on behalf of the Board of Directors

Navid Fazil	Jahan Zeb Khan Banth
(Chief Executive Officer)	(Director)

Place: Faisalabad

Date: April 30, 2024

Third Quarter Report

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