Sugar & Allied Industries: FARAN SUGAR MILLS LIMITED - Half Year Ended March 31 2007
The company was incorporated in Pakistan on November 03, 1981 as a public limited company and is listed on Karachi and Lahore stock exchanges.
The principal business of the company is to manufacture and sale of white sugar. The plant is located at Sheikh Bhirkio, Tando Mohammad Khan, District Hyderabad. Its plant went into commercial production in 1983 with installed sugarcane crushing capacity of 3,000 metric tons per day (tpd).
The capacity was extended to 8000 tpd as it is located in the midst of vast cane growing area which ensures required quantity/quality of sugarcane. It has been reported in the website of Faran Sugar Mills Ltd, besides payments to cane growers and short term loans to meet the input requirements the company has built up strong relationship which further ensures uninterrupted supply of sugarcane to the plant.
During first half of the financial year October 2006 to September 2007 (HYM 06-07), the company generated sales in terms of revenue at Rs 977.18 million as against Rs 953.71 million posted in the same period last year (SPLY). Sales increased by 2.4% but gross profit decreased by 37.9% to Rs 65.87 million as compared to Rs 104.48 million posted in the SPLY which shows drastic decline.
The directors of the company reasoned that due to higher production cost, mainly because of lower sucrose recovery and drastic decrease in selling price of molasses, the company sustained loss from current season's production activities.
Further additional sales tax fixed at a higher rate by the Government compared to its actual value had adversely affected both its sales volume and profitability. However amongst other factors, carry over stock of last year, made significant contribution in the profitability that absorbed loss of operational activities of current season 2006-07.
The current crushing season 2006-07, commenced on November 10, 2006 but due to shortage of cane, the plant stopped operation on December 1, 2006. The operation was resumed on December 17, 2006 and continued up to April 11, 2007.
During current season the company crushed 733.06 thousand metrics tons of sugarcane at an average recovery of 9.0% (last season: 9.65%). Sugar production was 65.97 thousand metric tons (last season 56.04 thousand metric tons). During the HYM 06-07 the company earned net profit after taxation at Rs 30.50 million as against Rs 32.85 million in the SPLY.
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Performance Statistics (Mln Rs)
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Balance Sheet -As At-
March 31 September 30
2007 2006
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Un-audited Audited
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Share Capital Paid-up: 188.27 188.27
Reserves & Surplus: 80.46 91.37
Shareholders Equity: 268.73 279.64
Ner Realized (Loss)/
Gain in Investment: (0.24) 0.44
L.T. Debts: 55.01 60.81
Deferred Liabilities: 353.77 353.95
Current Liabilities: 1,064.04 338.14
Fixed Assets Tangible: 438.93 449.43
Investment: 86.70 84.74
Security Deposits: 1.09 0.73
Current Assets: 1,214.59 498.08
Total Assets: 1,741.31 1,032.98
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Profit & Loss A/c for Half Year Ended -March 31-
2007 2006
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Net Sales: 977.18 953.71
Gross Profit: 65.87 104.48
Operating Profit: 49.21 92.26
Finance (Cost): (7.94) (19.56)
Other Income: 9.59 3.90
Profit Before Taxation: 47.88 72.64
Profit After Taxation: 30.50 32.85
Earnings Per Share (Rs): 1.62 1.74
Share Price (Rs) on 23/07/07: 17.00 -
Price/Earning Ratio: 10.49 -
Debt/Equity Ratio: 17:83 18:82
Current Ratio: 1.14 1.47
Gross Profit Margin (%): 6.74 10.96
Net Profit Margin (%): 3.12 3.44
R.O.A. (%): 1.75 3.18
R.O.E. (%): 4.50 4.72
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COMPANY INFORMATION: Chairman: Mohammad Amin Ahmed Bawany; Vice Chairman: Mohammad Omer Amin Bawany; Chief Executive: Ahmed Ali Muhammad Amin; Chief Financial Officer & Company Secretary: Muhammad Ayub; Registered Office: 3rd Floor, Bank House No 1 Habib Square, M.A. Jinnah Road Karachi; Website URL: www.faran.com.pk; Mills: Shaikh Bhirkio, Taluka Tando Mohammad Khan District Hyderabad Sindh.
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