The company (CPBM) produces writing and printing paper, poster paper and coated and unquoted board in various grammages, sizes and forms. Box plant produces corrugated boxes of various sizes and weights upto three colour printing.
CPBM has captive power plant sufficient to meet current and future power needs. This is a subsidiary of CPBM. The company is the only ISO 9001:2000 certified Paper and Board unit of Pakistan.
During the year under review the company posted record net sales. But pretax profit at Rs 308.22 million and after tax profit at Rs 203.86 million were lower than preceding year's. This was despite higher other operating income and net sales.
Gross profit declined by 6.7% and General & Admin Expenses increased by 11.7% while selling and distribution expenses increased by 24.3%, other operating charges declined by 22.8%.
On the other hand financial charges at Rs 78.07 million were more than three and a half times of the previous year's.
The company has excellent track record of profit distribution based on previous five years statistics. For the year under review the directors decided to skip the dividend in view of meeting cash flow requirement of a mega expansion project of over Rs 7.5 billion.
For this project the company raised Rs 1.29 billion through right issue. Rs 5.5 billion will be mobilised through syndicate loan.
Century Paper and Board Mills Ltd (CPBM) is a part of Lakson Group of Companies. The Group has diversified interests in industries such as cigarettes, paper and board, soaps and detergents, instant fruit drinks, packaging, fast food chain, textiles, information technology, insurance, travel and tours, surgical goods, chemical formulations.
The company was incorporated in Pakistan as a public limited company in 1984 and is quoted on Karachi and Lahore Stock Exchanges. The registered office of the company is situated at Lakson Square Building No 2, Sarwar Shaheed Road, Karachi. CPBM's principal business is the production, sale and marketing of paper, board and related products.
As regards ownership of its equity the company directors, members of their family, associated companies and related parties own 43.05% of the CPBM's total 64.26 million shares of Rs 10 each. Investors from general public own 11.47% and NIT and ICP hold 15.95% of the company's stock. Remaining shares are held by other institutional investors.
During the last four years market value of its share has remained more than four times of its par value. On August 25, 2006, the closing price of its share was quoted at Rs 41.85 per 10-rupee share. During the last one year the highest price of the share was quoted at Rs 97.50 per share. At the current price of its share, its market capitalisation has soared to Rs 2.69 billion from the present paid up capital of Rs 0.64 billion.
The company has excellent track record of regular distribution of annual dividends. During the 2001 to 2005 its cash dividends were very attractive ranging between 25% and 45%.
As regards the year under review (FY 2005-06) the directors decided to skip the dividend in order to enable them meet cash flow requirement for the ongoing project of PM-7.
The company launched in the second quarter of the year its expansion project of over Rs 7.5 billion in view of rising packaging board demand in the country.
This expansion project envisages installing a new Board Machine which will increase the capacity by 130 thousand metric tonnes of packaging board, representing more than 100% increase in existing capacity of the company.
As regards financing of the project the company is mobilising resources through equity finance and syndicated loan.
The company raised Rs 1.29 billion through hundred percent right issue at premium. The country's financial sector formed a syndicate of seven banks who have agreed to lend Rs 5.5 billion for a 10 years period.
The directors foresee the project's commercial production by 1st quarter of calendar year 2008.
As regards existing production facility the overall production of the company increased by 7% over the last year as a result of addition of one paper machine (PM-6) during the second half of the financial year.
During FY 2005-06 net sales amounted to Rs 3.35 billion registering 11.4% growth over Rs 3.01 billion in the previous year. This increase has been attributed to volume gains, favourable product mix and improvement in the selling prices during the year.
Gross profit in the sum of Rs 459 million, is lower than last year's in spite of volume increase. This was primarily due to lower contribution during the gestation period of the company's new investment, increase in the cost of new materials specially wheat straw and other key input costs.
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Performance Statistics (Million Rupees)
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30th June 2006 2005
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Share Capital-Paid-up: 642.58 321.29
Reserves: 2,178.43 1,155.29
Shareholders Equity: 2,821.01 1,476.58
L.T. Debts: 440.48 533.07
Deferred Taxation: 362.35 271.67
Current Liabilities: 814.67 562.97
Fixed Assets: 3,376.93 2,110.94
Intangible Assets: 0.21 0.50
L.T. Loans: 0.14 0.03
L.T. Deposits & Other Receivables: 4.19 1.59
Current Assets: 1,057.04 731.23
Total Assets: 4,438.51 2,844.29
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Sales Profit & Pay Out
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Sales-Net: 3,352.66 3,009.78
Gross Profit: 458.62 491.81
Other Operating Income: 49.46 22.82
Operating Profit: 386.29 398.49
Financial Charges: (78.07) (22.02)
(Depreciation): (246.48) (206.55)
Profit Before Taxation: 308.22 376.47
Profit After Taxation: 203.86 237.31
Earnings Per Share (Rs): 4.77 6.08
Dividend Cash (%): - 45
Share Price (Rs) on 25/08/06: 41.85 -
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Financial Ratios
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Price/Earning Ratio: 8.77 -
Book Value Per Share: 43.90 45.96
Price/Book Value Ratio: 0.95 -
Debt/Equity Ratio: 14:86 27:73
Current Ratio: 1.30 1.30
Asset Turn Over Ratio: 0.76 1.06
Days Receivables: 24 22
Days Inventory: 54 49
Gross Profit Margin (%): 13.68 16.34
Net Profit Margin (%): 6.08 7.88
R.O.A. (%): 4.59 8.34
R.O.C.E. (%): 5.62 10.40
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Production Capacity & Production (000' Tons)
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Paper & Paper Board Produced:
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Annual Production Capacity (3 Shifts):100.00 80.00
Actual Production: 87.20 81.79
Capacity Utilization (%): 87.20 102.24
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Paper & Paper Board Conversion
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Annual Production Capacity (3 Shifts): 12.00 12.00
Actual Production: 9.59 6.36
Capacity Utilization (%): 79.92 53.00
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COMPANY INFORMATION: Advisor: Sultan Ali Lakhani; Chairman & Chief Executive: Iqbal Ali Lakhani; Director: Tasleemuddin Ahmed Batlay; Company Secretary: Ramzan Ali Halani; Head Office, Registered Office, Corporate/Shares Office & Regional Sales Office (South): Lakson Square Building No 2, Sarwar Shaheed Road, Karachi 742000; Website: www.centurypaper.com.pk; Regional Sales Office (North): 41-K, Model Town Lahore; Mills: 67 KM, Lahore-Multan Highway N-5 District Kasur.
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