BOC Pakistan Limited (BOC Pakistan), formerly Pakistan Oxygen Limited, was incorporated in 1949 to acquire the assets in Pakistan of the then Indian Oxygen and Acetylene Company Limited.
It was originally a 100% subsidiary of the British Oxygen Company Limited (now the BOC Group) which was established in 1886. On March 17, 1958, the company became a public limited company and its capital structure was broadened by the offer of 40% shares to Pakistan Nationals.
Since then this equity structure has been maintained. Its shares are quoted on all the Stock Exchanges of Pakistan. The company is principally engaged in the manufacture of industrial and medical gases, welding electrodes and marketing of medical equipment. Total number of employees as on September 30, 2005 was 411 persons (2004: 426 persons).
BOC Group companies operate in more than 50 countries including Pakistan. BOC Pakistan, being a member of the BOC Group can offer customers in Pakistan both the experience to solve local problems and the highest international standards demanded by the industrial leaders of today.
The new Line of Business (LOB) structure has been adopted by the BOC Pakistan from October 1, 2004 to conform to the BOC Group plc. global reporting structure, revised recently. The new LOB structure of the company comprising (i) Process Gas Solutions (PGS) and (ii) Industrial and Special Products (ISP) is expected to be more responsive to the customer needs.
The Process Gas Solutions (PGS) line of business covers business with larger-scale industrial customers, typically in the oil and chemicals, food and beverage, metals, and glass sectors. Gases and services are supplied as part of customer specific solutions.
These range from supply by pipeline or from dedicated on-site plants to the largest users and to supply by road tankers in liquefied form to others. Contribution by PGS to company operations including profitability is summarized below.
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Process Gas Solutions (Audited) (Rs in 000)
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Year Ended September 30, 2005 2004
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Gross Sales: 939,446 813,112
Less: Trade discount & S. Tax: 107,573 101,820
Net Sales: 831,873 711,292
Cost of Sales: 398,030 356,507
Gross Margin: 433,843 354,785
Distribution and marketing: 47,872 30,858
Administration Expenses: 52,628 61,727
Sub total: 100,500 92,585
Operating Margin: 333,343 262,200
Gross margin/Net Sales: 52% 50%
Operating margin/Net Sales: 40% 37%
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The Industrial and Special Products (ISP) covers gases for cutting and welding, hospitality, laboratory applications and a variety of medical purposes are mainly distributed under pressure in cylinders. The ISP line of business covers products and services provided to this section of the market together with sales of packaged chemicals. Customers are typically in the fabrication, engineering, automotive, refrigeration, hospitality or medical sectors. The customer base is therefore broad and varied. The number of separate customers served by ISP is much greater than the other line of business. In addition to supplying gases, it also supplies a range of associated equipment. This includes medical, cutting and welding products and associated safety equipment.
Contribution by ISP to company operations including profitability is summarized below.
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Industrial and Special Products (Audited) (Rs in 000)
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Year ended September 30, 2005 2004
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Gross Sales: 1,047,989 928,778
Less: Trade discount & S. Tax: 127,463 118,421
Net Sales: 920,526 810,357
Cost of Sales: 618,986 485,294
Gross Margin: 301,540 325,063
Distribution and marketing: 65,053 60,200
Administration Expenses: 66,605 69,648
Sub total: 131,658 129,848
Operating Margin: 169,882 195,215
Gross margin/Net Sales: 33% 40%
Operating margin/Net Sales: 18% 24%
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BOC Pakistan enjoys satisfactory financial position-both short term and long term. The company operations are highly profitable. The company has shown robust growth in sales profitability. Cash dividend for the year ended September 30, 2005 was 120% as against 130% for the previous year. Dividend pay out for 2005 works out at 81% compared to 98% for the previous year. With expectations of high growth in the manufacturing sector in Pakistan, the company expects the demand for its products to further grow in the coming years. Comparative performance statistics are given below.
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Performance Statistics (Rs in 000)
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Balance Sheet (Audited)
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As on September 30, 2005 2004
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Share Capital-Paid-up: 250,387 250,387
Reserves: 517,932 511,396
Un-appropriated Profit: 294,808 256,923
Equity-Basic: 1,063,127 1,018,706
Surplus on Revaluation of Assets 0 0
Total Equity: 1,063,127 1,018,706
Non-Current Liabilities: 368,126 327,378
Capitalization: 1,431,253 1,346,084
Current Liabilities: 533,591 591,600
Total Liabilities and Equity: 1,964,844 1,937,684
Operating Fixed Assets: 1,275,466 1,348,962
LT loans, deposits, etc: 45,768 18,902
Stock-in-Trade: 68,408 90,618
Trade Debts: 119,047 88,734
Current Assets: 643,610 569,820
Total Assets: 1,964,844 1,937,684
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Ratios:
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Current Ratio: 1.21 0.96
Debt-Equity Ratio: 26:74 24:76
Book Val./share - Rs: 42.46 40.69
Quoted Share Price- (23-2-06)- Rs: 149.50 -
Price/Book Value Ratio: 3.52 -
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Income Statement
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Year ended September 30, 2005 2004
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Net Sales: 1,752,399 1,521,649
Gross Profit: 735,383 679,848
Operating Profit: 465,158 427,110
Profit before Taxation: 502,159 429,823
Profit after Taxation: 369,924 332,039
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Ratios:
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Cash Dividend: 120% 130%
Dividend Amount: 300,464 325,503
Dividend payout ratio: 81% 98%
Gross Profit/Net Sales: 42% 45%
Operating Profit/Net Sales: 27% 28%
Profit after Tax/Net Sales: 21% 22%
Net Profit/Equity: 35% 33%
ROA: 19% 17%
ROCE: 26% 25%
Earnings Per Share (Rs): 14.77 13.26
Inventory Turnover (times): 25.62 16.79
Receivable Turnover (times): 14.72 17.15
Price/Earning Ratio: 10.12 -
Asset Turnover (times): 0.89 0.79
Days Inventory: 14 22
Days Receivable: 25 21
Debt Service Coverage (times): 1.23 2.17
Cash flow Summary 2005 2004
Net Cash flow, Operations: 449,786 471,448
Net Cash flow, Investing: -36,749 -194,155
Net Cash flow, Financing: -420,737 -302,433
Change in net Liquidity: -7,700 -25,140
Net Liquidity at beginning: 263,464 288,604
Net Liquidity at end of period: 255,764 263,464
Products & Annual Production 2005 2004
Oxygen/Nitrogen (MM Cu. Meters): 42.619 40.183
Hydrogen (MM Cu. Meters): 1.478 1.446
Diss. Acetylene (MM Cu Meters): 0.143 0.158
Nitrous Oxide (Million Gallons): 30.66 31.123
Welding electrodes (Metric Tons) 2,287 1,916
Carbon Dioxide (Metric Tons): 8,403 3,353
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COMPANY INFORMATION: Chairman: Munnawar Hamid OBE; Chief Executive: Syed Ayaz Bokhari; Director: Mike S. Huggon; General Manager PGS: Syed Ayaz Bokhari; General Manager ISP: Syed Ainul Hadi; Director of Finance & Company Secretary: M. Ashraf Bawany; Auditors: M/s A.F. Ferguson & Co, Chartered Accountants; Solicitors: Surridge & Beecheno; Share Registrar: THK Associates (Pvt) Limited Registered Office: West Wharf, Dockyard Road, Karachi-74000; Web Address: www.bocpakistan.com
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