International Industries : Transmission of Quarterly Report for the Period Ended 31-12-2022

for the period ended December 31, 2022

Independent Auditor's Review Report	07

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Mr. Kamal A. Chinoy

Mr. Mustapha A. Chinoy

Mrs. Selina Rashid Khan

Suite 210-5800

Ambler Drive, Mississauga

ONL4W4J4, Canada

INTERNATIONAL INDUSTRIES LIMITED 03

For the period ended December 31, 2022

The Directors of your Company are pleased to present the financial statements for the half year ended December 31, 2022.

The uncertain politico-economic situation prevalent in the country during the second half of the year continued to result in a challenging business environment, including rising costs - particularly energy prices, sharp increase in interest rates, difficulties in obtaining import financing and energy shortages. These were further exacerbated by negative global conditions such as the ongoing war in Ukraine and recessionary headwinds in most developed markets. This has adversely impacted the Company's business during the period under review. Domestic sales volumes were 39% lower than the same period last year and sales revenue for the period stood at Rs.12.9 Bn, which was 29% lower than the same period last year. A reduction in volumes was witnessed across all product segments as infrastructure development and construction activity remained sluggish in government as well as private sectors. Furthermore, key industries such as car and bike assembly came to a virtual standstill cutting off another major sales avenue for the Company. Additionally, the global economic slowdown and severe winter conditions in North America contributed to a drop in export volumes by 59%.

The decline in revenue resulted in an unconsolidated Profit after Tax for the period under review was Rs. 764 Mn (EPS 5.79), compared to a Profit after Tax of Rs. 1,857 Mn (EPS 14.08) during the first half of last year. This includes dividend income of PKR 1,142 Mn (SPLY: 1,764 Mn) from subsidiary and associate companies.

Dampened demand and depressed economic conditions also affected our major subsidiary, International Steels Limited (ISL), which reported Net Sales Revenue of Rs. 33.925 Bn which was down 22% from Rs.43.294 Bn over the same period last year. It generated a Profit after Tax (PAT) of Rs. 61 Mn (EPS 0.14) which was down 98.6% from Rs. 4,224 Mn (EPS 9.71) during the same period last year.

Efforts to develop the construction solutions business, in collaboration with a globally respected German company, continue to generate strong interest from the domestic market. A first-of-its-kind project is underway in Lahore and efforts on building a sustainable pipeline of business in this segment continue with strong momentum. The current challenges in establishing Letters of Credit are hampering the growth of this business, but the management is hopeful that these challenges will not remain insurmountable.

Pakistan's attempts to garner the support of donor countries and lending institutions have finally begun to show some early signs of promise - and will need to culminate in the revival of the IMF program. Only after these result in an inflow of external funds will the economy begin to show signs of recovery. This is an imperative for business conditions to improve and allow all major industries, including your Company, to improve operating results in the second half of the year. In the meantime, the Company will continue to strive to improve efficiencies and reduce costs, as well as make its strongest efforts in maintaining its share in both domestic and key export markets.

We extend our gratitude to all stakeholders for their continued support during this time of unprecedented challenges and look forward to a productive second half of the financial year.

For & on behalf of the Board of Directors

Kamal A. Chinoy

Chairman

Karachi.

Date: January 31, 2023

INTERNATIONAL INDUSTRIES LIMITED 04