During the year under review the company registered impressive growth in sales - domestic volume sales increased by 19% while in terms of value the growth was @52% and export sales grew by 20%.
The company is holding sufficient stocks bought at higher prices but now prices are declining and hopefully when stabilised the results would be good.
The outlook for the coming year has the certainty of good business as the company has expanded its capacity, improved technology, upgraded capability for wider product range. During the period under review the company generated earning per share at Rs 8.72 (2003-04: Rs 9.19 and declared attractive dividends - cash dividend at Rs 3.75 per share and bonus shares at Rs 11.00 per share. The company has never skipped dividend as shown in the operating highlights published in the company's annual report 2005. The company's share is trading at Rs 88 per share which is close to nine times of the par value.
International Industries Limited was incorporated in the province of Sindh in 1949 and is listed on Karachi, Lahore and Islamabad Stock Exchanges. The company is a pipe manufacturing unit and produces hot and cold rolled based steel pipes and tubes for bicycles, transformers, fans, tents, furniture and other mechanical and general engineering purposes.
The company also produces galvanised pipes for use in transmission of water, oil, natural gas and other fluids.
API Line pipe is produced for the gas companies conforming to API Grades.
The company has its own Cold Rolled Mill Complex. Cold Rolled sheet and stripes are used in the manufacture of bicycles motorcycles, auto and bus body parts, electrical appliances, furniture and other engineering parts.
International Industries Limited is the market leader in all segments of pipes within the country having market share of over 30%.
The company remains the leading exporter of welded steel pipes and tubes from Pakistan and is selling its products in all continents. The manufacturing facilities are located in Landhi Industrial Area, Karachi. During the year under review the company completed phase II of major expansion with the addition of four tubemills and a stiller and crossed 150,000 tonnes (2003: 100,000 tons) in production and sale.
The year 2004 witnessed the award to the company Best Export Performance Trophy for Export of Engineering Products mechanical. In the year 2000, the company had achieved certification to ISO 9001:2000 (first company in Pakistan) and ISO 14001:1996. The company is a recipient of Top 25 Companies of Pakistan award for 2001, 2002 and 2003.
Last year the company's net sales had crossed Rs 4 billion mark and during the year under review the turnover crossed Rs 7 billion mark in net sales. During the year the company registered growth in sales by 57.06% to Rs 7,102.25 million (2003-04: Rs 4,521.80 million) which is highly commendable growth. The volume gain in domestic sales was 19% whereas value gain was 52% indicating the quantum of price increase which became necessary to off-set rise in the price of raw material.
Export sales grew by 20% in terms of volume and 69% in terms of value. The projections for volume growth were even more but for the unprecedented escalation in steel price of raw material.
The directors while analysing the impact of rising prices of steel on business found that the year began with the company holding a healthy inventory at favourable prices which resulted in good margins in the first quarter.
Thereafter steel prices continued to rise sharply leading to increase the selling price. Passing on the whole of the price increase to the customer would have had an adverse impact on the volumes. The company opted to work with lower margins and maintain the projected volume growth.
After middle June, 2005 the steel prices started to fall rapidity and the company is holding inventory which were bought at higher price. If the steel prices stabilise at current price (end July-05) the remaining year should produced good results.
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Performance Statistics (Million Rupees)
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30 June 2005 2004
Share Capital-Paid-up: 427.89 163.01
Reserves: 741.20 739.67
Shareholders Equity: 1,169.09 902.68
Surplus on Revaluation of
Fixed Asset 542.99 558.65
L.T. Debts: 331.25 256.25
Deferred Taxation: 142.14 109.30
Current Liabilities: 2,754.41 2,416.93
Fixed Assets: 1,657.63 1,416.79
Intangible Assets: 7.65 -
L.T. Deposits: 2.77 3.14
Current Assets: 3,271.83 2,823.88
Total Assets: 4,939.88 4,243.81
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Sales, Profit & Pay Out
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Sales-Net: 7,102.25 4,521.80
Gross Profit: 869.15 789.67
Operating Profit: 618.79 608.11
Other (Charges)/Income-Net: (10.71) (32.00)
Financial (Charges): (105.34) (51.96)
(Depreciation) & Amortization: (45.24) (109.90)
Profit Before Taxation: 502.74 524.15
Profit After Taxation: 373.01 393.15
Earnings Per Share (Rs): 8.72 9.19
Market Price Per Share
(Rs) on 11/08/ 88.00 -
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Financial Ratios
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Price/Earning Ratio: 10.09 -
Book Value Per Share: 16.91 55.37
Price/Book Value Ratio: 0.75 -
Debt/Equity Ratio: 16:84 15:85
Current Ratio: 1.19 1.17
Asset Turn Over Ratio: 1.44 1.06
Days Receivables: 26 35
Days Inventory: 151 207
Gross Profit Margin (%): 12.24 17.46
Net Profit Margin (%): 5.25 8.69
R.O.A. (%): 7.55 9.26
R.O.C.E. (%): 17.07 21.52
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Capacity & Production (000 Metric Tones)
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A) Capacity at the end of the year:
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Pipe: 200.00 180.00
Galvanizing: 120.00 120.00
Cold Rolled Steel Strip: 47.00 47.00
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B) Actual Production for the year:
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Pipe: 148.81 123.88
Galvanizing: 93.95 83.54
Cold Rolled Steel Strip: 36.04 39.89
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C) Capacity Utilized (%):
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Pipe: 50.00 68.82
Galvanizing: 78.29 69.62
Cold Rolled Steel Strip: 76.68 84.86
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COMPANY INFORMATION: Chairman: J.R. Rahim; Managing Director & CEO; Towfiq H. Chinoy; Director: K.M.M Shah; Chief Financial Officer: Mohamed H. Walli; Company Secretary: Liquat Ali Tejani; Registered Office: 101, Beaumont Plaza, 10 Beaumont Road Karachi 75530; Web Address: www.iil.com.pk Branch Office: Chinoy House, 6 Bank Square Lahore 54000; Factory: LX15-16, Landhi Industrial Area Karachi-75120.
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