Automobile Parts & Accessories: AGRIAUTO INDUSTRIES LIMITED - Year Ended 30-06-2004
The company is primarily engaged in the manufacture and sale of components for automotive vehicles, motor cycles and agricultural tractors. Its manufacturing facilities are located in the province of Balochistan at Hub Chowki which is adjoining area of city of Karachi having the largest concentration of automobile assemblers. During FY 2003-04, the year under review, the company's revenue grew by 84% and the sales crossed one billion rupees threshold reaching Rs 1.281 billion.
This is mainly because of the upsurge in the automotive market including motorcycles and tractors. The company also ventured in the export market but with a small volume. The company's gross profit margin improved from 21.51% to 26.82% in the FY 2003-04. Increased sales and productivity contributed towards profitability. The company's net profit after taxation shot up by 1.67% to 178.83 million and dividend payout improved to 30% from 15% last year.
Agriauto Industries Ltd was incorporated in the province of Sindh as a public limited company and listed on the Karachi and Lahore Stock Exchanges.
Its 5 rupee share's market price was quoted at 45.90 per share on 18th November 2004. This was the closing price of that day which works out to more than 9 times of the par value. During the last one year the price of the share moved upward from Rs 26.50 to Rs 51.65 per share.
The rising trend in the share's market value was supported by its improved financial backbone, rising stock market index, excellent profit distribution policy and above all expanding demand of its product due to upbeat auto and tractor sector.
In the pattern of the company's share holding the largest number of shares was owned by 10 foreign investors which works out to 38.28% of the company's stock. Out of this group if foreign investors, ones company Robert Finance Corporation AG had 24.74% stake in its equity. The company's 4,149 individual investors' ownership of its stocks was 34.52%. Directors, their spouses had only 0.05% stock.
The company has suddenly started moving towards the prosperity trail.
The economics of prosperity shows more opportunity it also pops up more severe challenges for defending market share and ensure sustainability of profit. As the customers requirement become more demanding in terms of quality price and delivery dead lines of the products and services. Agriauto Industries Ltd remained almost one step ahead of challenges.
The Chief Executive of the company Sohail P. Ahmed speaks of required changes in the organisation, plant layout, systems and processes, material souring and conductive extensive training.
To improve the company's technological capability, the leadership in the company arranged training of some of its engineers at Kayaba, Japan and Gabriel USA. Also technical personnel from Kayaba spent time at its factory during the year. Training was also carried in Pakistan, both of the hands and minds. A total of 4007 man hours of training were carried out at various echelons.
The company has also added some testing and simulating equipment to test and prove its product and the process of further improvement in skills and knowledge continue. The company has also started work on TS16949 certification instead of ISO 9002 and according to the directors of the company TS16949 certification is more comprehensive and attuned to automotive sector. This will help in its exports as it is the standard acceptable internationally in its business.
The company is also investing in the manufacturing facilities for 2 wheelers shocks, as the 2 wheeler market is growing by leaps and bounds. This would enable to face increasing competition particularly again less expensive imported Chinese products.
The directors are unhappy that after sales market is further threatened by parts brought from China at "ridiculously" low prices. Hence they have approached the Government in this respect.
The continue to focus target to build up an export market and for that they have invested in more "productive" machinery and have upgraded some machinery in preparation to meet the future. They have also made efforts in other areas to improve the vitality of their enterprise. Administrative expenses increased by 27%, mainly due to the renovation of administrative offices at the factory and the purchase of software. They have added fixed assets worth Rs 11.46 million (2002-03: Rs 7.52 million).
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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June 30
2004 2003
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Share Capital-Paid-Up: 120.00 120.00
Reserves & Surplus: 213.60 70.78
Shareholders Equity: 333.60 190.78
Deferred Taxation: 3.46 4.07
Current Liabilities: 229.97 112.72
Tangible Fixed Assets: 77.41 81.33
L T Deposits: 1.38 1.62
Current Assets: 488.24 224.62
Total Assets: 567.03 307.57
Sales, Profit & Pay Out:
Revenue: 1,281.05 695.63
Gross Profit: 343.64 149.64
Other Income: 1.67 1.85
Operating Profit: 301.93 120.07
Financial (Charges): (0.48) (5.58)
(Depreciation): (13.06) (14.00)
Profit Before Taxation: 279.33 106.37
Profit After Taxation: 178.83 66.88
(Dividend) Cash @ 30%2003:@ 15%: (36.00) (18.00)
Earnings Per 5 Rupee Share (Rs): 7.45 2.79
Share Price (Rs) Dated: 18-11-2004: 45.90 -
Financial Ratios:
Price Earning Ratio: 6.16 -
Book value Per Share: 13.90 7.95
Price Book Value Ratio: 3.30 -
Debt Equity Ratio: 0:100 0:100
Current Ratio: 2.12 1.99
Asset Turn Over Ratio: 2.25 2.26
Days Receivables: 31 40
Days Inventory: 59 79
Gross Profit Margin (%): 26.82 21.51
Net Profit Margin (%): 13.95 9.67
R O A (%): 31.53 21.75
R O C E (%): 53.06 34.32
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Plant Capacity & Production:
"The production capacity of the company cannot be determined as this depends on relative proportions of various types of vehicles and agricultural tractors produce by OEMs."
COMPANY INFORMATION: Chairman: R.D Minwalla; Chief Executive: Sohail P. Ahmed; Company Secretary: Fahim Kapadia; Registered Office: 5th Floor House of Habib 3, JCHS Main Sharah-e-Faisal Karachi; Web Address: agriauto.com.pk Factory: Mauza Baroot, Hub Chowki Distt Lasbella Balochistan.
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