During the year under review the Modaraba has produced record highest financial and operating results in its career. Gross Revenue was recorded at Rs 842.54 million as against Rs 743.624 million in the preceding year registering 13.3% increase. Lease rental income at Rs 828.88 million accounted for 98.4% of Gross Revenue as against same percentage ie 98.4% in the preceding year. Other income at Rs 13.66 million increased by 14.1%.
This income included dividend income, profit on disposal of leased assets gain on sale of investment, profit on Morabaha finances. Leased assets portfolio was also the largest in its history.
Investment portfolio - available for sale - amounted to Rs 329.01 million and the portfolio shows more emphasis on Bank Al Habib, Metropolitan Bank, Soneri Bank, PTCL and PSO.
FHM profit for the year amounted to Rs 71.28 million as against Rs 69.56 million in the previous year. For the year under review, the Board of Directors of its management company announced profit distribution at 20% and 100% issuance of Right Certificate at twenty percent and 100 percent issuance of right certificate at a premium of Rs 2.50 per certificate.
First Habib Modaraba (FHM) received Modaraba Association of Pakistan's (MAP) Appreciation Award on 29th September 2003. During FY July 2003-June 2004 (FY 2003-04), Pakistan Credit Rating Agency (Pvt) Ltd (PACRA) maintained the entity ratings of FHM at AA- (Double A Minus) and A1+ (A one Plus) for the long term and short term respectively.
"A1+" is the highest level in PACRA's rating scale for short-term rating. While awarding above ratings, PACRA has acknowledged the continued ability of First Habib Modaraba for having low expectation of credit risk and very strong capacity for timely payment of financial commitments. (FHM) Chairman Wazir Hussain Jafree emphasised that the ratings also recognises the Modaraba proactive approach towards tapping opportunities in an increasingly competitive market and maintaining infection free lease portfolio through efficiency and prudence in risk management FHM is a perpetual, multi-purpose Modaraba and is primarily engaged in the business of leasing.
In addition to its core business of leasing FHM is also engaged in other mode of financing such as Musharika and Morabaha arrangements.
The 5-Rupee certificates of FHM are quoted on the stock exchanges in Karachi, Lahore and Islamabad. On 23rd November 2004, the closing rate of the certificate was quoted at Rs 7.90 per certificate carrying 58% premium over the par value. Its strong financial fundamentals along with the rising stock market index have fuelled the fast rise in the market value of FHM certificate during the last one-year.
In this period the price of the certificate zoomed to Rs 12.55 from Rs 7.55 registering 66% rise.
The FHM's profit distribution profile has been outstanding as evident from regular and attractive payouts. During the last six years the profit payout rates ranged been 20% to 22.5% which is quite rewarding if compared to the yields on investment in fixed income securities or banks PLS deposits.
In a separate letter to the scanner of Business Recorder, Iqbal Arif, Second Vice President of First Habib Modaraba emphasised about the high dividend payout, its large disbursement for leases, and above all building of quality lease assets portfolio.
During FY 2003-04 the Modaraba's leased assets portfolio increased to Rs 1.724 billion from Rs 1.413 billion recorded in the preceding financial year 2002-03. This shows 22% growth.
The year under review has recorded highest ever figure in leased assets. During the last six years we find that the average yearly growth rate during last 5 years (since 2000) ranged between 12.44% and 43.46%.
The 5-year's average growth works out to 25.40%. Some of the constraints in the expansion of various assets in Modaraba sector are the mobilisation of funds based on Sharia mode as well as limitation in network of branches. FHM seems to have overcome these restraints as it has come up with "certificate of Musharika."
However, it appears that during the year under review the closing balance (Rs 88.185 million) has reduced by Rs 45.36 million from the opening balance of Rs 133.543 million. Nevertheless the balance is still of substantial amount.
It may be hoped that FHM website www.habibmodaraba.com will neutralise the limitation of branch network also.
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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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Certificate Capital-Paid-up: 252.00 252.00
Reserves & Surplus: 384.50 219.76
Certificate Holders Equity: 636.50 471.76
L T Debts: 237.23 237.62
Security Deposits Against
Assets Leased Out: 114.03 96.32
Deferred Liability-Gratuity: 3.17 2.45
Current Liabilities: 1,140.89 784.44
Fixed-Assets Lease Out: 1,723.62 1,413.28
Fixed-Assets In Own Use: 2.92 3.78
Fixed Assets Intangible: 0.09 0.12
L T Advances & Deposits: 1.17 1.07
Current Assets: 404.02 174.34
Total Assets: 2,131.82 1,592.59
Lease Rentals: 828.88 731.65
Other Income: 13.66 11.97
Gross Revenue: 842.54 743.62
(Depreciation) On Fixed
Assets Leased Out: (680.35) (576.47)
Financial (Charges): (61.54) (71.02)
Other (Charges): (21.45) (18.84)
Total (Expenses): (763.34) (666.33)
Modaraba Company's
Management (Fee): (7.92) (7.73)
Profit For The Year: 71.28 69.56
Profit (Distribution)@
20% (2003: 21%): (50.42) (52.92)
Earning Per Certificate (Rs): 1.49 1.38
Rs 5% Modaraba Certificate Price
(Rs) On 23-11-2004: 7.90 -
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Financial Ratios:
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Price/Earning Ratio: 5.60 -
Book Value Per Certificate (Rs): 12.63 9.36
Price Book Value Ratio: 0.63 -
Debt/Equity Ratio: 27:73 33:67
Current Ratio: 0.35 0.22
Net Profit/Total Income (%): 8.46 9.35
R O E (%): 11.20 10.92
R O A (%): 3.34 3.26
R O C E(%): 7.19 8.60
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COMPANY INFORMATION: Modaraba Company: Habib Modaraba Management (Private) Limited; Chairman & Chief Executive: Wazir Hussain Jafree; Managing Director: Muhammad Shoaib; Directors: Dara F. Mirza, Abbas Ali Muhammad, Sheikh Ehsanuddin; Company Secretary: Amir Kaleem; Registered Office: 5th Floor HBL Plaza (Hirani Centre) I.I. Chundrigar Road, Karachi; Web Address: www.habibmodaraba.com
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