Leasing Companies: SAUDI PAK LEASING COMPANY LIMITED - Nine Months Ending March 31, 2005

SPLC is a public limited company incorporated in the province of Sindh having its registered office located at Lakson Square Building No 1, Saddar, Karachi. It has five branches located in Lahore, Islamabad, Faisalabad, Multan and Sialkot. Saudi Pak Leasing Company was listed on Karachi Stock Exchange in 1991 and it is also listed on Lahore and Islamabad Stock Exchanges.
At present SPLC shares are trading at Rs 12.80 per share carrying 28% premium over the par value. During the last one year the market value of its share appreciated from Rs 12 to Rs 18.25 per share.
During 9M 2004-05 the period under review, its lease revenue (both finance and operating leases) amounted to Rs 172.29 million (SPLY: Rs 153.15 million) which was 63.64% (SPLY 69.43%) of total revenue.
Total revenue also included a large amount generated from investment portfolio. Revenue from investment amounted to Rs 84.84 million as against Rs 63.81 million booked in the SPLY.
Total revenue in the sum of Rs 270.73 million registered 22.74% growth over the amount of Rs 220.58 million posted in the corresponding period of the last financial year.
But profit before taxation decreased substantially to Rs 37.14 million from Rs 46.77 million in the SPLY.
A number of factors contributed towards the erosion of profitability at this stage. Financial and other charges increased by Rs 31.41 million whereas administrative and operating expenses increased by Rs 18.16 million. While income from operating lease operations were down by Rs 0.54 million, the direct cost of operating leases increased by Rs 2.6 million.
Provision for potential lease losses shot up by Rs 25.14 million from Rs 14.91 million in 9M 2003-04 to Rs 40.05 million during the period under review. Fortunately there was big favourable reversal of tax provision in the sum of Rs 56.78 million which boosted the Net Profit After Taxation to Rs 88.42 million (SPLY Rs 42.17 million) despite higher current and deferred tax provisions at Rs 5.5 million (SPLY Rs 1.5 million). Now the fierce competition and rising interests in the leasing sector pose big challenges.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                 March 31      June 30

                                     2005         2004

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Share Capital-Paid-up:             253.00       220.00

Reserves & Profit:                 177.94       144.52

Shareholders Equity:               430.94       364.52

(Deficit) on Revaluation of

Available for Sale Investments:   (54.24)      (16.94)

L.T. Debts:                        693.95       598.84

L.T. Certificates of Investment    224.77       316.48

L.T. Deposits:                     556.90       455.69

Deferred Liability:                 48.58        47.58

Current Liabilities:             2,635.13     1,980.19

Fixed Assets-Tangible:              99.69        42.13

L.T. Loans:                         54.20        20.71

Net Investments Leases:          2,029.06     1,514.97

Current Assets:                  2,353.08     2,168.55

Total Assets:                    4,536.03     3,746.36

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Profit & Loss A/c For Nine Months Ended

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 March 31                            2005         2004

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Income From Finance Lease Opera    170.64       150.96

Operating Lease Operations:          1.65         2.19

Investments:                        84.94        63.81

Other Income:                       13.60         3.62

Total Income:                      270.73       220.58

Total (Expenses):                (193.54)     (146.19)

Operating Profit Before Provision  77.19         74.39

Provisions (Potential Lease Loss  (40.05)      (27.62)

Profit Before Taxation:             37.14        46.77

Reversal Tax Provision:             56.78            -

Profit After Taxation:              88.42        42.17

Earnings Per Share (Rs):             3.40         1.67

Share Price (Rs) on 1-6-2005:       12.80            -

Price/Earning Ratio:                 3.76            -

Book Value Per Share (Rs):          17.03        16.56

Debt/Equity Ratio:                  65:35        63:37

Current Ratio:                       0.89         1.10

Lease Income/Total Profit (%):      63.64        69.43

Net Profit/Total Income (%):        32.65         1.91

R.O.E. (%):                         20.51        11.56

R.O.A. (%):                          1.94         1.12

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