During the year under review this Pakistani subsidiary of Japanese multinational has been able to achieve the highest sales revenue in its career. Since the last four years the company has maintained attractive profit distribution profile whose beneficiaries are mostly foreign shareholders.
While sales were highest, the gross profit of its largest business segment "chassis" was also high commensurate to sales. But the gross profits of other segments such as bus and truck bodies and other business, sharply decline.
The company posted pretax profit at Rs 381.58 million (2004: Rs 499.74 million) showing sharp decline by 23.6% from the previous year's. However, the market value of Hinopak Motors shares remained very high throughout the last 52 weeks.
In this period the lowest price was quoted at Rs 102 per share and highest price at Rs 241.75 per share. The company has incurred Rs 214 million as capital expenditure mainly to acquire competitive edge of quality. Out of this expenditure, Rs 170 million was incurred on the new state-of-the-art paint shop - Electro Deposition (ED) paint facility. The implementation of new ERP system which is Oracle based has been started.
Hinopak Motors Limited is a public limited company incorporated in Pakistan and listed on the Karachi and Lahore Stock Exchanges. The registered office and manufacturing facilities of the company are situated at D-2, S.I.T.E Manghopir Road Karachi. The URL of its website is www.hinopak.com.
Since October 19, 1998 Hino Motors, Ltd, Japan is the Holding Company of Hinopak Motors Limited, by virtue of its 59.33 percent shareholding of the company. But foreign investors shareholdings aggregate to 89.01 percent. As regards the individual investors, there are 970 shareholders and their aggregate stake in its equity works out to only 2.03% of the company's stocks. Remaining stocks are owned by local institutional investors and out that one financial institution ie NBP Trustee Department, NIT owns 8.34% of its stock.
The principal activity of the company is the assembly, progressive manufacture and sale of Hino buses and trucks in Pakistan. The company was listed at Karachi Stock Exchange in 1988. At present the Hinopak Motors shares are trading at Rs 142 per share which is more than 14 times of the par value. During the last 52 weeks the market value of the share had peaked at Rs 241.75 per share.
Since 2002 the company has maintained the policy of regular profit distribution and since the last three years the announcement of yearly cash dividends has been very attractive. For the year 2005, the company announced each dividend at Rs 6 per share as against Rs 8.50 per share last year as well as prior to that year.
During the year under review the company produced 2,328 chassis as against 3,179 chassis in the previous year registering 26.7% decline. As regards vehicle bodies the output sharply declined to 739 units as against 1712 units in the previous year showing 56.8% decrease. While the capacity utilisation in the chassis department was 38.8% in vehicle bodies department the capacity utilisation was 41.05%.
However the company improved sales revenue to Rs 6.367 billion from Rs 5.522 billion in the preceding year posting 15.3% increase over the preceding year's.
But gross profit margin decreased to 10.63 percent from 13.95 percent in the previous year. Total gross profit was 12.06% lower at Rs 677.17 from Rs 770.09 in the preceding year.
Looking at gross profit by department the gross profit of chassis amounted to Rs 608 million as against Rs 531 million in the previous year showing 14.5% increase.
The contribution of gross profit of chassis to the total gross profit was 89.8%.
The contribution of gross profit of bus and truck bodies was Rs 25 million or 3.7% of total gross profit. But the gross profit sharply declined by 78.6% from Rs 117 million in the previous year.
In case of other business of Contract Assembly and spare parts gross profit amounted to Rs 44 million (2004: Rs 121 million) showing 63.6% decline over the preceding year's.
The chairman of the company Kunwar Idris pointed out in his review that the chassis GP increased in line with sales. The bus and truck bodies GP decreased substantially due to decrease in UTS sales and the diminishing volume of a large institutional contract most of which was executed in the previous year.
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Performance Statistics (Million Rupees)
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31st December 2005 2004
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Share Capital-Paid-up: 124.01 124.01
Reserves & Surplus: 1,043.51 900.09
Shareholders Equity: 1,167.52 1,024.10
Surplus on Revaluation Fixed Assets: 296.40 302.26
L.T. Debts: 9.31 12.59
Deferred Taxation: 54.33 47.42
Current Liabilities: 1,639.45 2,032.58
Fixed Assets: 831.26 677.77
Intangible Assets: 2.41 4.70
Loans & Advances: 6.40 6.39
Trade Deposits: 6.32 5.57
Current Assets: 2,320.62 2,724.52
Total Assets: 3,167.01 3,418.95
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Sales, Profit & Pay Out
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Sales: 6,367.61 5,521.80
Gross Profit: 677.17 770.09
Other Operating Income: 48.88 28.36
Profit from Operations: 435.06 509.39
Finance (Costs): (53.48) (9.65)
(Depreciation & Amortization): (57.41) 53.19
Profit Before Taxation: 381.58 499.74
Profit After Taxation: 242.96 335.73
Earnings Per Share (Rs): 19.59 27.07
Dividend Per Share (Rs): 8.50 6.00
Share Price (Rs) on 02/05/06: 142 -
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Financial Ratios
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Price/Earning Ratio: 7.24 -
Book Value Per Value: 94.15 82.58
Price/Book Value Ratio: 1.68 -
Debt Equity Ratio: 1:99 1:99
Current Ratio: 1.42 1.34
Asset Turn Over Ratio: 2.01 1.62
Days Receivables: 19 16
Days Inventory: 115 137
Gross Profit Margin (%): 10.63 13.95
Net Profit Margin (%): 3.82 6.08
R.O.A. (%): 7.67 9.81
R.O.C.E. (%): 15.91 24.22
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Plant Capacity & Production (Number Units)
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A) Chassis--------
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Plant Capacity (Single
Shift Without Overtime): 6,000 6,000
Production: 2,328 3,179
Capacity Utilization (%): 38.8 52.98
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B) Bodies---------
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Plant Capacity (Single
Shift Without Overtime): 1,800 1,800
Production: 739 1,712
Capacity Utilization (%): 41.05 95.1
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COMPANY INFORMATION: Chairman: Kunwar Idris; Managing Director & CEO: Keiji Maeda; Company Secretary: Muhammad Saleem; Registered Office & Works: D-2, S.I.T.E. Manghopir Road P.O. Box 10714, Karachi 75700; Web Addrss: www.hinopak.com
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