Textile Spinning: ZAMAN TEXTILE MILLS LIMITED - Half Year Ended March 31 2004

It is a textile spinning unit located in S.I.T.E Kotri District Dadu in the province of Sindh. Zaman Textile Mills Ltd was incorporated on July 11, 1969 in the province of Sindh having its registered office located 60, Muslimabad, Jamshed Quarters, Karachi.
It is listed on Karachi Stock Exchange and on 20-09-04, the share in the company was priced at Rs 65 per share. During the last one year the market value of the share ranged between Rs 36 and Rs 100.
The company has opted for the buy back of its share and the repurchase price has been fixed at Rs 65 per share which is really a lucrative offer.
As regards its financial position it is strong as it can be seen from its excellent long term debt to equity ratio, and current ratio and book value of the share.
During the half year (FHY 2003-04) ended March 2004, the company registered commendable growth of 34.7% in sales which increased to Rs 338.31 million as against Rs 251.06 million posted in the same period last year SPLY.
But gross margin remained under severe pressure as it declined from 3.57% to 3.15%. Inevitably the growth rate in gross profit was relatively modest at 18.9% despite substantial growth in sales.
Administrative expenses were about the same as SPLY but sales and distribution expenses were much lower nearly on third of SPLY. Financial charges were also off by Rs 1.34 million and booked at Rs 4.86 million as compared to Rs 6.20 million booked in SPLY. The company's pre-tax profit amounted to Rs 2.12 million as against Rs 2.46 million in the corresponding period last year.
The Chief Executive of the company Ebrahim Qassim pointed out that the sharp increase in price of raw cotton in local market could not be absorbed in selling price of yarn.
However, by curtailing unproductive activities and expenditures, as well as optimising the product mix, helped the management in the cost control and neutralising the adverse effects of increase in price of raw material.
About the future prospect the company has geared itself to encounter competition by achieving better quality and value added products. For this purpose the company's expansion and renovation project is underway which will not only increase capacity but also provide value addition.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                 March 31 September 30

                                     2004         2003

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Share Capital-Paid-Up:              33.04        33.04

Reserve and Surplus:                53.10        52.00

Shareholders & Equity:              86.14        85.04

L T Debts:                          78.22        14.00

Deferred Liabilities:               15.73        15.92

Current Liabilities:               387.77       160.56

Tangible Fixed Assets:             158.37       140.93

L T Deposits:                        2.20         1.83

Current Assets:                    407.29       132.76

Total Assets:                      567.86       275.52

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Profit & Loss A/c For The

 Half Year Ended            March 31 2004         2003

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Sales:                             338.31       251.06

Gross Profit:                       10.67         8.98

Operating Profit:                    6.92         3.10

Other Income:                        0.17         5.69

Financial (Charges):                (4.86)      (6.20)

Profit Before Taxation:              2.12         2.46

Profit After Taxation:               1.10         0.97

Earning Per Share (Rs):              0.33         0.29

Share Price (Rs) on 20-09-04:       65.00            -

Price/Earning Ratio:               197.00            -

Book value of Share (Rs):           26.07        25.73

Debt/Equity Ratio:                  48:52        14:86

Current Ratio:                       1.05         0.83

Gross Profit Margin (%):             3.15         3.57

Net Profit Margin (%):               0.33         0.39

R.O.A:                               0.19         0.35

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