Millat Tractors declared a cash dividend of 130 percent while its profit recorded a healthy growth of 49 percent during the last fiscal year. Millat Tractors results for the FY04 ended June 30, 2004 appeared to be quite promising. For FY04, the leading tractor manufacturer registered a profit after tax of Rs 394.65 million, showing an increase of 49 percent.
The company has announced cash dividend of Rs 13 per share or 130 percent as well as bonus issue of 5 percent (one bonus share for every two ordinary share).
Although the net sales increased by 33 percent to Rs 6,985 million as compared to Rs 5260.7 million in FY03, gross profit margins dropped from 12.4 percent to 12.1 percent on account of costly imports of CKD kits, appreciation of sterling and increase in the raw material prices.
The operating expenses also surged by 17 percent to Rs 195 million due to the aggressive marketing activities as the company's tractor sales volume shot up from 14,215 units in FY03 to 19,007 units during FY04, which is the highest ever in the history of Millat Tractors.
There was a slight improvement in other income by 2 percent to Rs 46 million whereas, financial charges slashed by 67 percent to Rs 11 million, due to the availability of lower cost of funding.
According to a report of Capital One Equities, the company's export to Afghanistan increased from 1.0 million dollars to 2.7 million dollars during FY04, which is evident from the fact that the company expanded its bookings by 45 percent to 42,000 units as against 29,000 units during the same period last year.
The sale of new models viz. MF-260 and MF-375E witnessed a substantial increase on account of improved quality. The company has already tied up the safety belts in order to meet the challenges, which are expected in the post-WTO era by upgrading and enhancing its manufacturing capabilities and improving the features of different brands of tractors.
Millat Tractors has been consistently outperforming the index since October 2003. Since the beginning of the current fiscal, Millat scrip has appreciated by 65 percent, price as on July 1, 2003: Rs 170 per share where the scrip has also touched a high of Rs 299 during the said period (Highest ever price level is Rs 365 per share recorded on October 15, 2004).
The brokerage house reiterate their positive stance based on the strong long-term earning capacity of the company as it is still foreseen a substantial demand for tractors emanating in the country despite the threats of the post-WTO period.
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