Textile Spinning: FAWAD TEXTILE MILLS LIMITED - Nine Months Ended June 30 2004

It is a public limited company incorporated in the province of Punjab having registered office located at 6-F, Block-H Gulberg II Lahore. It is a textile spinning unit and is listed on Karachi and Lahore Stock Exchanges. It was listed at Karachi Stock Exchange in 1990.
On 28th October 2004, the closing price of Fawad Textile Mills was quoted at Rs 7.25 at 27.5% discount. During the last one year the price of the share peaked at Rs 10.50 per share crossing the barrier of par value. The company did not declare dividend since the last two years.
During October 2003-June 2004, the nine months under review, the company's sales turnover significantly improved by 10.36% to Rs 439.80 million compared to Rs 398.52 million posted in the preceding corresponding period.
Gross margin came under severe pressure as margins eroded by 2.23 percentage points and reduced to 5.65% compared to 7.88% posted in the same period last year. During the 3rd Quarter 2003-04, both volume and value of exports remained on the lower side compared to Q3 of the preceding financial year. Manufacturing costs including wages, salaries and benefits were higher. Despite lower gross profit the company posted higher pretax profit.
The main contributor to improved profitability was 33.3% reduction in the financial expenses. There is uncertainty about the future profitability as the main factors which count are decrease in raw material cost coupled with increase in selling price of yarn. In order to improve its viability the company is improving its fixed asset base with new machines.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                  June 30 September 30

                                     2004         2003

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Share Capital-Paid-Up:              92.07        92.07

Reserves & Profit:                  26.36        23.47

Shareholders Equity:               118.43       115.54

Surplus on Revaluation Of F/Assets: 32.65        32.65

L T Debts:                         113.91        96.47

Deferred Liabilities:               19.30        19.17

Current Liabilities:               162.94       109.51

Tangible Fixed Assets:             227.41       231.90

L.T Deposits & Deferred Costs:       0.04         0.03

Current Assets:                    219.78       141.41

Total Assets:                      447.23       373.30

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Profit & Loss A/c For The

 Nine Months Ended           June 30 2004         2003

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Sales-Net:                         439.80       398.52

Gross Profit:                       24.86        31.41

Financial (Expenses):              (10.42)     (15.64)

Other Income:                        0.07         0.08

Profit Before Taxation:              5.12         3.68

Profit After Taxation:               2.89         1.66

Earning Per Share (Rs):              0.31         0.18

Share Price (Rs) Dated 28/10/04:     7.25            -

Price/Earning Ratio:                23.38            -

Book value of Share (Rs):           12.86        12.55

Debt/Equity Ratio:                  43.56        39.61

Current Ratio:                       1.35         1.29

Gross Profit Margin (%):             5.65         7.88

Net Profit Margin (%):               0.66         0.41

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