Neishabour Sugar Company released its financial statements for its 9-month period ending September 22, 2015. Holding 200 IRR bn capital, this company recognized 115 IRR loss per share; last year, it had recognized 189 IRR EPS with 81 IRR bn. Furthermore, although this company had predicted to suffer 36 IRR loss per share until the end of FY2015, it increased that amount to 148 IRR for the whole current year. The following matters have been mentioned as the reasons to this loss increase:
- the reduction of raw sugar use from 30,000 tons to 5,000 tons due to the non-issuance of raw sugar entrance permit by the authorities and therefore, the reduction of the produced molasses and the reduction of the earnings yielded by selling secondary products by 4,621 IRR mn;
- the increase of the sales price of the main product in reality in comparison with the budget forecast of 651 IRR;
- the increase of the final cost compared to the sales amount; and
- therefore, the increase of sugar sales price compared to the conventional price due to credit sales.
This company could sell products worthy of 275 IRR bn which showed a 30% increase; however, due to the final cost raise by 281.5 IRR bn, this company recognized 6 IRR bn gross loss. Besides, the public and administrative costs grew compared to the same period last year and the operating profit turned into the 18.5 IRR bn operating loss. While this company had enjoyed a 16% profit margin for the 9 month period of the year ending September 22, 2014, this amount reached -2% for the same period this year.
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Although an agreement was reached between Iran and P5+1, the market continued its bearish trend started from the previous week. After Lausanne agreement, the market showed a rather severe and positive reaction; after reaching the final deal, however, it returned to its previous lower level. This shows that our capital market demonstrates an emotional behavior and many of investors enter the market taking a short-term viewpoint and they quickly exit the market. Nevertheless, it’s better to keep in mind that the occurrence of any change in business and market atmosphere takes time and the positive effects of this deal will be felt but in the long term. In fact, the country’s atmosphere must change. This requires many amendments in the legal structure of the country and interferences in the capital market must reach to a minimum; both of these issues, which are time-consuming tasks, require the collaboration of the government and parliament. Besides, today, the United Nation Security Council is going to issue a resolution to render all the previous nuclear-related resolutions null and void, which eventually leads to the lifting of sanctions that itself can exert a positive effect on the market. As a result, we hope to gradually witness a bullish market trend in the near future.
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