Dawood Hercules profit in the year ended December 31, 2003, recorded an increase of 74 percent as it has increased its investment in selected listed companies of Karachi Stock Exchange, increasing capital gains.
Dawood Hercules on Tuesday announced its financial results for 2003 and the profit during the period amounted to Rs 1.378 billion as compared with Rs 793 million of the preceding year.
The company declared a dividend of 20 percent, totalling to 100 percent for the full year. It paid 95 percent dividend and issued 50 percent bonus in 2002.
The company's sales during the year amounted to Rs 2.983 billion as against Rs 2.809 billion of 2002. Muneeza Imtiaz, research analyst at AKD Securities, said that according to National Fertiliser Development Corporation (NFDC), Dawood produced 432,000 tons urea at capacity utilisation of 97 percent this year.
The higher capacity utilisation, compared to 86 percent and 93 percent in 2001 and 2002, respectively, is on the back of relatively shorter gas curtailment periods during the year.
Moreover, like other fertiliser manufacturers, the company had been able to push most of its urea stock off its own warehouses to dealers.
She said that the main factor behind the surge in net profit during the year was rise in 'other income', derivative of the overall performance of the KSE.
Moreover, according to one of the analysts the company for last six months has increased its investment in local stock market, mainly Sui Northern Gas, Pakistan Oilfields, Faysal Bank and Southern Electric.
The investment in last three companies is quite nominal but holdings in Sui Northern Gas have witnessed an exorbitant jump.
Dawood Hercules investment in Sui Northern Gas to-date has risen to 22.4 percent.
"Since we do not foresee, a similar bull rally experienced in 2003, we expect the 'other income' number to reduce going forward," Muneeza said.
The 'other income' moved up to Rs 892 million as compared with Rs 310 million of previous year, showing an increase of 188 percent.
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