Textile Spinning: SHAHEEN COTTON MILLS LIMITED - Half Year Ended March 31 2004

This is a textile spinning unit operating at 34th km Lahore Sheikhupura Road Sheikhupura. During the half year under review the company has made turnaround by going into profit from loss in the same period last year (SPLY). Its total asset base expanded by Rs 145.5 million as compared to the figure in the SPLY.
This public limited company was listed at Karachi Stock Exchange in 1988. At present Shaheen Cotton shares closing prices has been quoted at Rs 7.50 per share at 25% discount to the par value of Rs 10. During the last one year the market value of the share had crossed the threshold of the par value.
The balance sheet of the company carries substantial accumulated deficit and negative figure in the investment revaluation reserve. The long term debt to equity ratio could not equalise its benchmark ratio of D/E ratio because the shareholders equity is posted with negative figure.
Liquidity position made attempt for improvement but has still to go up to at least equalise the benchmark ratio of current ratio.
But the organisation has been able to improve its operating performance. Sales in terms of value improved to Rs 436.29 million by Rs 91.62 million from Rs 344.67 million posted in the SPLY.
The company maintained the growth momentum as gross margin significantly increased. The increase in sales coupled with better margins improved its gross profit. In the Q2 (second quarter) the major part of production was of fine counts.
Cotton prices remained high during Q2 and at the same time the prices of yarn remained under pressure. However the company posted small profit of Rs 1.5 million replacing a large loss of Rs 3.41 million of the SPLY.
The company did not declare dividend during the last two years. After the approval of sui gas the company is importing 4 generators through lease finance of Rs 64 million.

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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:             117.84       117.84

General Reserve:                     2.00         2.00

Accumulated (Loss)                (201.90)    (208.82)

Shareholders Equity:               (82.06)     (88.98)

Investment Revaluation Reserve:     (7.85)      (7.85)

Surplus On Revaluation

 Of Fixed Assets:                  215.63       221.08

L T Debts:                         212.46       201.96

Deferred & Other Liabilities:      120.96       121.26

Current Liabilities:               251.27       117.44

Tangible Fixed Assets:             470.41       477.10

L T Investment:                         -        16.95

L T Security Deposits:               0.05         0.10

Current Assets:                    239.95        70.76

Total Assets:                      710.41       564.91

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Profit & Loss A/c For the

 Half Year Ended            March 31 2004         2003

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Sales-Net:                         436.29       344.67

Gross Profit:                       34.83        14.24

Operating Profit:                   20.52         0.39

Other (Charges)/Income:             (0.32)        0.62

Financial (Charges):               (16.38)     (19.58)

Profit/(Loss) Before Taxation:       3.83      (18.57)

Profit/(Loss) After Taxation:        1.48      (30.41)

Earning (Loss) Per Share (Rs):       0.13         2.58

Share Price (Rs) on 27-09-04:        7.50            -

Price/Earning Ratio:                57.69            -

Book Value of Share (Rs):           (6.69)      (7.55)

Debt/Equity Ratio:                  63:37        62:38

Current Ratio:                       0.95         0.60

Gross Profit Margin (%):             7.98         4.13

Net Profit Margin (%):               0.34       (8.82)

R.O.A:                               0.21       (5.38)

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