Tobacco: PAKISTAN TOBACCO COMPANY LIMITED - First Quarter Ended March 31 2005

The company is a part of British American Tobacco, the world's top most international tobacco group, with brands sold in 180 markets around the world. Its operations in Pakistan began in 1947, making it one of Pakistan's first foreign investments. Through these fifty-seven years, its continuous investment in brands, technology, innovation, people and the community in which the company operates has borne fruit in many ways. PTC is the largest excise tax generator in the private sector in the country.
In 2004, PTC paid the government close to Rs 16 billion in excise and sales taxes. This amounts to over Rs 50 million per working day. PTC is listed on stock exchange and on 5th May 2005, the closing price of its share was quoted at Rs 54 per share which is more than five times of the par value.
During the last one year the price of PTC share went up to Rs 72 per share from Rs 43 per share. During the quarter ended March 31, 2005, PTC has registered commendable growth both in sales and profit.
Turnover during January-March 2005 was recorded at Rs 7.542 billion showing 23.6% increase over Rs 6.101 billion in January-March 2004, same period last year (SPLY). This was mostly due to increase in volume sales particularly of its prominent brands Gold Flake and Gold Leaf. Gross margin also improved. Marketing Expenses were in the sum of Rs 373.50 million as against Rs 322.01 million and the increase in marketing expenses works out to 16% over same period last year.
The rise in these expenses were due to various trade initiatives and brand support activities. The quarter under review also witnessed 27.2% increase in administrative expenses mainly because of IT support to SAP implementation. The Company continued to focus on effective working capital management which helped in reducing its reliance on debts resulted in significant reduction in financial charges - a decrease of 47% vs. SPLY.
The company posted pre-tax profit at Rs 648.89 million as against Rs 324.89 million in SPLY showing increase by 99.7%. In addition to the commendable financial performance, PTC was recognised for its world class performance and contributions in the areas of Supply Chain Management by the US based Supply Chain Council, in April 2005, PTC was presented with both the 2005 Global Award for Supply Chain Excellence as well as the 2005 Award for Supply Chain Operations Excellence in the industry excellence.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                 March 31  December 31

                                     2005         2004

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Share Capital-Paid-up:           2,554.94     2,554.94

Un-appropriated Profit:          1,126.15       707.88

Shareholders Equity:             3,681.09     3,262.82

Deferred Income Tax:               621.74       624.47

Current Liabilities:             2,652.80     3,137.47

Tangible Fixed Assets:           3,487.06     3,564.41

Investment in Subsidiary Company:    5.00         5.00

L.T. Loans:                         16.10        16.32

L.T. Deposits & Prepayments:         5.17         4.43

Current Assets:                  3,442.30     3,434.60

Total Assets:                    6,955.63     7,024.76

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Profit & Loss A/c For The First Quarter Ended

 March 31                            2005         2004

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Turnover:                        7,541.91     6,101.36

Gross Profit:                    1,181.85       771.52

Operating Profit:                  684.15       351.88

Other Income:                       19.81         7.00

Financial (Charges):               (6.46)      (12.22)

Profit Before Taxation:            648.89       324.89

Profit After Taxation:             418.27       198.77

Earnings Per Share (Rs):             1.64         0.78

Share Price (Rs) 5-5-2005:          54.00            -

Price/Earning Ratio:                32.90            -

Book Value of Share (Rs):           14.40        12.77

Debt/Equity Ratio:                  0:100        0:100

Current Ratio:                       1.30         1.09

Gross Profit Margin (%):            15.66        12.64

Net Profit Margin (%):               5.54         3.25

R.O.A. (%):                          6.01         2.83

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