Kathmandu. KATHMANDU: Reliance Spinning Mills Limited, the largest yarn manufacturer in Nepal, has published its unaudited financial results for the third quarter of the current fiscal year. The data showed that despite a modest increase in the company’s earnings, there was a significant decline in profit.
As of mid-April of the current FY, the company earned an operating income of Rs 7.46 billion compared to Rs 7.39 billion in the same period last year. However, the cost of production has increased to Rs 6.51 billion.
The company’s net profit declined by 17.7 percent. The company had posted a net profit of Rs 26.68 crore in the same period of the current FY, compared to Rs 32.42 crore in the corresponding period of the previous FY. Similarly, the net profit decreased from Rs 1.02 billion to Rs 94.86 crore.
The company has pointed to the energy crisis as a major challenge. The Nepal Electricity Authority (NEA) has said that power generation has been affected due to unannounced load shedding. Similarly, the dispute regarding the electricity tariff of dedicated and trunk line is pending at Patan High Court.
According to the company, policy changes in the international market and fluctuations in the exchange rate of the US dollar have affected the price of raw materials. Financial expenses of Rs 22.10 crore have also put additional pressure on the profit. The company has paid-up capital of Rs 1.90 billion and reserve fund of Rs 7.55 billion.
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