Mandviwala Mauser Plastic Industries Limited
Mandviwala Mauser Plastic Industries Limited (PSX: MWMP) was incorporated in Pakistan as a public limited company in 1988. The principal activity of the company is the manufacturing and sale of plastic and allied products.
Pattern of Shareholding

As of June 30, 2024, MWMP has a total of 28.748 million shares outstanding which are held by 2661 shareholders. Directors, CEO, their spouses, and minor children have the majority stake of 78.94 percent in the company followed by the local general public holding around 20 percent shares. The remaining shares are held by other categories of shareholders.
Financial Performance (2019-24)
MWMP suspended its commercial operations from 2015 to 2020 due to severe power breakdowns and poor security conditions in Uthal, Baluchistan. It accomplished a complete overhaul of its plant and machinery and shifted it to a new location in Port Qasim Karachi. It undertook necessary installations and civil works during the period to resume its operations in 2021. The company posted significant growth in its net sales over the next years. Its bottom line stayed in the negative zone in 2021, however, posted sound profitability growth in the subsequent years. MWMP’s margins also strengthened over the years, registering their optimum values in 2024. The detailed performance review of the period under consideration is given below.
During 2020, when the company hadn’t started its commercial operations, its cost of sales amounting to Rs.26.74 million mainly comprised of salaries & wages, rent expenses, store & spares consumed as well as traveling, conveyance, and vehicle running expenses incurred during the year. Distribution expenses worth Rs.0.153 million are only comprised of advertising expenses. Administrative expenses worth Rs.8.99 million incurred during the year were majorly due to payroll expenses. MWMP also incurred Rs.0.191 as other expenses due to loss on assets destroyed during the transit. Finance costs only included bank charges. The company incurred a net loss of Rs.36.08 million in 2020, up 87.77 percent year-on-year. This translated into a loss per share of Rs.4.91 in 2020 versus a loss per share of Rs.2.61 recorded in 2019.

In 2021, MWMP posted net sales of Rs.123.11 million. During the year, the company produced 464 tons of 210-litre Mauser L-Ring drums. This translated into capacity utilization of 10.85 percent in 2021. The cost of sales was recorded at Rs.123.08 million in 2021. This translated into a gross profit of Rs.0.0275 million in 2021 versus a gross loss of Rs.26.74 million posted in 2020. GP margin stood at 0.022 percent in 2021. Distribution expenses mounted by 1679.14 percent to clock in at Rs.2.72 million in 2021. This is mainly comprised of freight charges. Administrative expenses grew by 12.71 percent to clock in at Rs.10.13 million in 2021. This was mainly on the back of higher payroll expenses as well as fee & subscription charges incurred during the year. As the plant became operational, the company hired new employees to build a workforce of 41 employees, up from 9 employees in 2020. During 2021, MWMP recorded other income of Rs.9.59 million versus other expenses of Rs.0.19 million recorded in 2020. Other income comprised of insurance claims recovered during the year. MWMP’s operating loss diminished by 91 percent to clock in at Rs.3.24 million in 2021. During the year, the company obtained short-term finance from a bank which resulted in a finance cost of Rs.1.6 million. In the previous years, the company had only obtained loans from Meskey & Femtee Trading Company (Private) Limited which was payable on demand. In 2021, MWMP posted a net loss of Rs.6.735 million, down 81.34 percent year-on-year. This translated into a loss per share of Rs.0.23.

In 2022, MWMP’s net sales registered a staggering year-on-year growth of 272.21 percent. During the year, the company produced 1111 tons of plastic products, up 139.44 percent year-on-year. This translated into capacity utilization of 26 percent in 2022. The product categories that contributed the most to the topline growth were the chemical, lube oil, and food sectors. The cost of sales surged by 244.85 percent in 2022 due to higher raw material charges as well as a massive spike in utility expenses. This translated into gross profit of Rs.33.78 million in 2022, up 1227.30 times. GP margin stood at 7.37 percent in 2022. Distribution expenses escalated by 249.56 percent in 2022 due to higher freight & forwarding charges incurred during the year. Conversely, administrative expenses dipped by 9.77 percent in 2022 due to a plunge in payroll expenses despite an uptick in the number of employees which stood at 46 in 2022. Other income ticked up by 2.46 percent in 2022 as MWMP received a waiver of rent expenses worth Rs. 10.35 million from M/S M.M. Flour (Private) Limited. MWMP posted an operating profit of Rs.24.94 million in 2022 which culminated in an OP margin of 5.44 percent. Finance costs mounted by 369.18 percent in 2022 due to higher discount rates and increased short-term borrowings obtained during the year. The company registered a net profit of Rs.11.66 million in 2022 with EPS of Rs.0.41 and an NP margin of 2.55 percent.

In 2023, MWMP’s net sales grew by 35.27 percent. During the year, the company increased its total capacity from 4275 tons to 5775 tons. It produced 1180 tons of plastic products in 2023, up 6.21 percent, translating into capacity utilization of 20.43 percent. Topline growth mainly came from revenue proceeds from the chemical and food sectors. Cost of sales grew by 23.95 percent in 2023, however, higher sales volume and increased prices of final products resulted in 177.47 percent growth in gross profit in 2023. GP margin climbed up to 15.12 percent in 2023. Distribution expenses grew by 19.76 percent in 2023 due to higher freight & outward charges incurred during the year. Administrative expenses multiplied by 63 percent in 2023 predominantly due to higher payroll expenses incurred during the year. This was on account of inflationary pressure as the number of employees stayed intact at 46 in 2023. MWMP recorded other expenses of Rs.3.63 million in 2023 due to higher provisioning done for WWF and WPPF. Operating profit strengthened by 155.75 percent in 2023 which translated into OP margin of 10.29 percent. Finance costs escalated by 96.68 percent in 2023 due to higher discount rates and increased short-term borrowings. Net profit multiplied by 248.96 percent to clock in at Rs.40.699 million in 2023. This culminated in an EPS of Rs.1.42 and an NP margin of 6.57 percent.

In 2024, MWMP’s net sales posted a phenomenal year-on-year growth of 78.85 percent. The company produced 1834 tons of plastic products in 2024, up 55.42 percent year-on-year. This translated into capacity utilization of 31.76 percent in 2024. The growth was mainly attributable to the chemical and food sectors. During the year, the company launched 250-liter drums for the chemical sector which received great traction. Gross profit grew by 155.82 percent in 2024, translating into the highest-ever GP margin of 21.63 percent. This was because of superior sales volume and upward revision in prices of final products. Distribution expenses mounted by 28.14 percent in 2024 due to higher freight charges coupled with sales commission expenses incurred during the year. Higher payroll expenses, fee & subscription charges as well as office expenses drove up administrative expenses by 82.93 percent in 2024. During the year, the company enhanced its workforce to 57 employees to meet higher demand and achieve greater product diversification. Other expenses spiraled by 1505.42 percent in 2024 due to allowance for ECL on trade debts, impairment of assets in bonds, raw materials in bond written off, provision for slow-moving stores as well as higher profit-related provisioning done during the year. Nonetheless, operating profit picked up by 118.79 percent in 2024 with OP margin clocking in at 12.59 percent. Finance costs multiplied by 31.41 percent in 2024 due to monetary tightening. Net profit improved by 165.53 percent to clock in at Rs.108.069 million in 2024 with EPS of Rs.3.76 and NP margin of 9.75 percent.
Recent Performance (1QFY25)

In 1QFY25, MWMP’s net sales slid by 0.11 percent year-on-year. This was due to the fact that high freight charges restrained the demand for drums for Ethanol export. Moreover, stable oil prices resulted in a decline in the prices of plastic products. Cost of sales, however, inched up by 0.36 percent in 1QFY25 due to higher energy tariffs. This resulted in a 2.51 percent dip in gross profit in 1QFY25 with the GP margin clocking in at 15.78 percent down from the GP margin of 16.17 percent recorded in 1QFY24. Lower sales volume resulted in a 24.22 percent decline in distribution expenses in 1QFY25. Administrative expenses mounted by 49.48 percent in 1QFY25 due to inflationary pressure which pushed up the payroll and utility expenses. Operating profit slid by 7.75 percent in 1QFY25 with OP margin recorded at 11.33 percent versus OP margin of 12.26 percent recorded in 1QFY24. Finance costs tumbled by 46.33 percent in 1QFY25 due to the onset of monetary easing. Net profit inched up by 0.58 percent in 1QFY25 to clock in at Rs. 17.01 million with EPS of Rs.0.59. NP margin clocked in at 7.21 percent in 1QFY25 versus NP margin of 7.16 percent recorded in 1QFY24.
Future Outlook
The prices of plastic products are expected to stay under pressure due to a decline in oil prices. However, MWMP plans to offset the impact of subdued prices by increasing its volume. That said the company plans to launch 120-liter and 160-liter open-top drums to diversify its products range and improve its sales volume.
Recently, MWMP disclosed through a public announcement on the PSX website the intention of its acquisition by Meskay & Femtee Trading Company (Private) Limited, a leading grain company in Pakistan that is particularly known for premium rice exports. The potential acquirer plans to purchase 21.391 million ordinary shares of MWMP, representing 74.41 percent of its total outstanding share capital.
Meskay & Femtee Trading Company (Private) Limited has been a major creditor of MWMP providing interest-free demand financing to the company to meet its short-term requirements. Besides, the potential acquirer has also been a corporate guarantor for MWMP to obtain loans from the banking sector. The anticipated acquisition will not only improve the cash flow position of the company freeing it from the reigns of external borrowings but is also expected to open new doors of opportunities for MWMP particularly in the food exports segment.
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