Reliance Spinning Mills (RSML) has published third quarter financial report of the current FY. According to the report, both the company's income and profit declined compared to the corresponding period of the last FY.

1. Income and Profit Status

Sales Income: The company earned Rs 7.46 billion in operating income as third quarter of the current FY compared to Rs 7.39 billion of the review period of the last FY. Although there has been a slight improvement in income, the cost of production has affected the profit.

Net Profit: The net profit of the company has declined. The company made a profit of Rs 266.8 million which is 17.7 percent degrowth compared to Rs 324.2 million of the review period of the last FY.

Total profit: Total profit decreased from Rs 1.02 billion to Rs. 948.6 million as the cost of production increased to Rs 6.51 billion.

2. Key financial indicators

3. Problems and Challenges

Energy crisis: The undeclared load shedding by the Nepal Electricity Authority (NEA) is directly affecting the production.

Electricity tariff dispute: The case related to the dispute with the Nepal Electricity Authority (NEA) regarding the dedicated and trunk line electricity tariff and the fine is pending at the Patan High Court.

International Markets: Policy changes in the international market and fluctuations in the exchange rate of the US dollar have affected the price of raw materials.

4. Business analysis

The company has carried out its internal trade business as usual despite the unfavorable political and economic environment. However, the financial expenses stood at Rs 2210 million, which added to the profit. The company has paid-up capital of Rs 1.90 billion and reserve fund of Rs 7.55 billion.