Cordoba Logistics & Ventures Limited

Cordoba Logistics & Ventures Limited (PS: CLVL) was incorporated in Pakistan as a public limited company in 1986. It was previously known as Mian Textile Industries Limited. The company changed its business from Textile to logistics and other ventures in 2021 after the acquisition of 70 percent of the company’s paid-up capital.

Pattern of Shareholding

As of June 30, 2022, CLVL has a total of 22.105 million shares outstanding which were held by 1786 shareholders. The directors of the company hold 66.19 percent of its shares followed by local general public holding 29.35 percent shares of CLVL. NIT and investment companies account for 2.38 percent of the outstanding shares of CLVL. The remaining ownership is divided among other categories of shareholders…

Financial Performance (2018-23)

CLVL’s topline immensely plunged in 2019; however its bottomline turned out to be much healthier in 2019 than the previous year. In the subsequent two years, CLVL discontinued its business due to ongoing tensed economic conditions. In the meantime, in 2020, it received an acquisition offer which was delayed due to outbreak of COVID-19. During the first three quarters of 2021, the company was in the process of acquisition which was ultimately completed on April 22, 2021 after which the new management changed the principal line of business from Textile to logistics and other ventures. The company commenced its new line of business on June 30, 2021. In 2022, CLVL made revenue from its logistics business however it trickled down into a net loss. In 2023, not only did the topline made a staggering growth but bottomline was also recovered from net loss. The detailed performance review of each of the years under consideration is given below.

In 2019, CLVL (then Mian Textile Industries Limited) posted a topline drop to the tune of 89 percent year-on-year. The topline represented income from trading of vehicles. The company’s trading business of textile products wasn’t profitable anymore due to dejected macroeconomic backdrop and hence during the year, the company disposed off its fixed assets and transferred the ownership to M/s Pakistan Tiles (Private) Limited for Rs.410 million. The gross profit declined by 89 percent year-on-year in 2019, however, GP margin stayed at 7.2 percent, slightly lesser than the GP margin of 7.4 percent posted in the previous year. Operating expense shrank by 17 percent year-on-year in 2019 due to considerable dip in non-operational expense particularly, fuel & power, impairment loss as well as salaries & wages. Other income which greatly propelled CLVL’s operating profit as well as net profit in 2018, massively slipped in 2019 due to high-base effect due to write off of long-term financial liabilities and deferred markup in 2018. As a consequence, the company made an operating loss of Rs.15.82 million in 2019 as against an operating profit of Rs.43.58 million in 2018. CLVL’s financial charges which comprised of bank charges inched down by 85 percent year-on-year in 2019. Income from discontinued operations which comprised of gain on disposal of assets held for sale saved the day for CLVL and translated into a net profit of Rs.93.80 million in 2019, up 116 percent year-on-year. EPS also surged from Rs.1.97 in 2018 to Rs.4.24 in 2019.

In 2020 and 2021, the company was in the process of acquisition and didn’t undertake any commercial business activity which pushed its revenue (trading income) to absolute zero for the two years and hence no cost of trading. In 2020, the company’s operating expense slumped by 34 percent year-on-year due to no distribution expense and non-operational expense incurred during the year. Other expense also dived down by 91 percent year-on-year in 2020 due to a significant plunge in the provision for doubtful receivables booked during the year. Operating loss measured down by 8 percent year-on-year n 2020 to clock in at Rs.14.61 million. As no financial charges and taxation was incurred in 2020, the net loss also stood at Rs.14.61 million in 2020 with a loss per share of Rs.0.66. In 2021, operating expense further sank by 25 percent year-on-year due to sizeable drop in payroll expense, utilities expense as well as legal and professional charges incurred during the year. CLVL didn’t incur any other expense in 2021, however, made other income of Rs.5.14 million mainly on account of disposal of land and other fixed assets. Operating loss and net loss was recorded at Rs.5.49 million in 2021, down 62 percent year-on-year with a loss per share of Rs.0.24. In 2021, the new management approved to inject Rs.200 million to meet the working capital requirements of the company, out of which Rs.25 million were already injected by the end of the year. In 2021, the company commenced its commercial activity by acquiring equity stake in Trukkr (Private) Limited, a tech-enabled logistics company.

In 2022, CLVL registered revenue of Rs.8.3 million from its new line of business of providing commercial vehicles on rentals as well as logistics services. The sponsors further injected Rs.147.42 million in the company during the year and undertook other commercial activities such as investment in Finox (Private) limited and Children Clothing Retail (Private) Limited. Direct cost was recorded at Rs.5.12 million which included loading and unloading cost as well as depreciation on vehicles. CLVL posted a gross profit of Rs.3.18 million in 2022 which translated into a GP margin of 38 percent. Operating expense escalated by 24 percent year-on-year primarily on the back of fee and subscription charges, directors’ meeting fee and auditors’ remuneration. Other income also slid by 61 percent year-on-year in 2022 due to high-base effect due to disposal of fixed assets in 2021. Operating loss grew by 46 percent year-on-year in 2022 to clock in at Rs.8.03 million. CLVL incurred finance cost (bank charges) of Rs.0.58 million in 2022 which translated into a net loss of Rs.8.61 million, up 57 percent year-on-year. Loss per share grew to Rs.0.37 in 2022.

Recent Performance (2023)

CLVL’s topline grew by 575 percent year-on-year in 2023 to clock in at Rs.56.05 million from logistics services and rental of commercial vehicles. CLVL also invested in Neem Exponential (Private) Limited and International Learning Center (Private) Limited to diversify its business operations. Besides, the company also incorporated a wholly owned subsidiary NBFC called Cordoba Leasing Limited. These investments were financed by a right issue of Rs.500 million which drove its total paid-up capital to Rs.721.052 million. Direct cost surged by 251 percent year-on-year in 2023. This culminated into 11 times growth in gross profit in 2023 with GP margin jumping up to 68 percent. Operating expense multiplied by 13 percent year-on-year in 2023. However, it was offset by a robust other income of Rs.15.04 million recorded in 2023, up 659 percent year-on-year. CLVL made an operating profit of Rs.38.22 million in 2023, resulting into an OP margin of 68 percent. Finance cost grew by 670 percent year-on-year in 2023. This coupled with the taxation expense resulted in a net profit of Rs.31.23 million. EPS clocked in at Rs.0.52 in 2023 while NP margin stood at 55.7 percent.

Future Outlook

Owing to depressed business activity on account of political and economic instability, the company couldn’t be able to materialize its forecasted revenue stream as a logistics and vehicle rental business. However, the company is making continuous to diversify its revenue by investing in varied businesses and sectors. This may keep CLVL revenue and profits afloat in the coming times. The company is currently managing its financing requirements through equity and loans from directors with a very little share of external short-term borrowings. If the same capital structure continues to persist, the company’s bottomline will stay safe from unprecedented level of discount rate.