During the year under review the company has been able to improve productivity and reduce loss in a big way. The financial position of the company remained modest as can be seen from the break up value of the share and long term debt to equity ratio.
The current ratio was getting closer to the benchmark ratio of "one." The future outlook as visualised by the directors in the beginning of January 2003 shows hopeful glimpses of the sugar industry.
The season 2003-04 is another bumper sugar crop and industry expects highest ever sugar production. The management of the company believes that in view of the ample availability of sugarcane, there will be no price competition amongst sugar mills.
Consequently there will be higher capacity utilisation and reduction in processing cost of sugar. However the directors think that the company's bottom line will depend on the sugar market.
Mehran Sugar Mills Ltd was incorporated in the province of Sindh on December 22, 1965 as a public limited company. Its registered office is located at Adamjee House, 8th Floor, I.I. Chundrigar Road Karachi.
The company is principally engage in the manufacture and sale of sugar. Its sugar mill is located at Tando Allahyar Distt.
Hyderabad, Sindh. Its starting of production date is January 1969. Its installed capacity has been rated at 7,000 tonnes cane crushing per day (TCD).
During the crushing season under review, (2002-03) the actual output was recorded at 5385 TCD as against 3634 TCD in the preceding year.
This shows 76.9% capacity utilisation and 48% increase in cane crushing output over previous season. The shortfall in production has been attributed to the shortage of raw material supply.
The crushing season started on 18th December, 2002 as against 10th November 2001 of the previous season. However duration of season was 118 days as against 112 days in the previous season.
The average sucrose recovery remained same as preceding season's 9.0%. The company recorded output of sugar at 57,296 metric tonnes, and output of molasses at 34,645 metric tonnes which shows 57% rise in sugar and 58.5% of rise in the output of molasses over the preceding year's corresponding figures.
Due to ample supply of sugar cane, the company was able to produce raw material at the government notified price as reported by the directors.
This situation allowed consistent crushing. The company also supplied at 2,232 tonnes sugar to TCP for export which as compared to 100,000 tonnes of sugar supplied by the industry to TCP for export, works out to 2.2%.
Inspite of depressed prices of sugar and molasses, the company's financial results were better than that of corresponding year's. This could be possible mainly due to higher production and reduced financial charges.
During the year under review, the company posted sales in terms of value at Rs 767.63 million as against sales of Rs 682.37 million in the preceding year showing 12.5% increase over the preceding year's. But this figure is 29.3% lower as compared to six year's highest sales amount of Rs 1.086 billion posted in the year 2001.
However it is a matter of relief that the company posted gross profit replacing the previous year's gross loss. Similarly the company posted operating profit as compared to operating loss in the preceding year.
Financial charges went down to Rs 17.17 million from Rs 32.99 million in the preceding year. Even than the bottom line could not escape from going into the red as the company booked loss before taxation at Rs 2.09 million. The last year's loss before taxation was booked at Rs 99.29 million.
Taxation of Rs 14.87 escalated the loss but the extraordinary item-liabilities written back downsized the loss. So at the end the loss after taxation and extraordinary item amounted to Rs 9.0 million (2001-02 Rs 103.58 million).
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Performance Statistics (Million Rupees)
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30 Sept 2003 2002
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Share Capital-Paid-up: 98.44 98.44
Reserves: 148.28 148.28
Accumulated (Loss): (101.66) (92.66)
Shareholders Equity: 145.06 154.06
Subordinated Loans: 69.00 -
L.T. Debts: - 72.72
Deferred Liabilities: 149.49 139.44
Current Liabilities: 326.84 244.96
Fixed Capital Expenditure: 364.68 375.49
L.T. Investments: 42.51 42.51
L.T. Deposits & Deferred Cost: 5.88 0.39
Current Assets: 277.32 192.79
Total Assets: 690.39 611.18
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Revenue, Profit & Pay Out
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Sales: 767.63 682.37
Gross Profit/(Loss): 44.39 (40.08)
Other Income: 1.66 2.40
Operating (Loss) Profit: 15.08 (66.30)
Financial (Charges): (17.17) (32.99)
(Depreciation): (29.75) (15.54)
(Loss) Before Taxation: (2.09) (99.29)
(Loss) After Taxation & Extra
Ordinary Item: (9.00) (103.58)
(Loss) Per Share (Rs): (0.91) (10.52)
Share Price (Rs) Dated 17.02.2004: 12.20 -
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Financial Ratios
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Price/Earning Ratio: (-) -
Book Value Per Share: 14.80 15.65
Price/Book Value Ratio: 0.82 -
Debt/Equity Ratio: 0:100 32:68
Current Ratio: 0.85 0.79
Asset Turn Over Ratio: 1.11 1.12
Days Receivables: 16 15
Days Inventory: 77 41
Gross Margin (%): 5.78 5.87
Operating Margin (%): 1.96 (9.72)
Net Profit Margin (%): (1.17) (15.18)
R.O.E. (%): (1.30) 16.94
R.O.A. (%): (2.47) 28.28
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Capacity & Production:
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Sugarcane Crushing TCD
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A) Capacity: 7,000 7,000
Actual Cane Crushing: 5,385 3,634
Utilised Capacity(%): 76.92 51.91
B) Average Sucrose Recovery
Percentage (%): 9.00 9.00
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COMPANY INFORMATION: Chairman: Muhammad Kasim Hasham; Chief Executive Officer: Mohammed Ebrahim Hasham; Director: Mohammed Hussain Hasham; Company Secretary & CFO: Roop Chand Panjwani ACA; Registered Office: Adamjee House I.I Chundrigar Road Karachi; Factory: Tando Allah Yar, Hyderabad, Sindh.
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