It has been gratifying record that the company has come out from the persistent accumulated loss and capital deficiency situation.
The company posted net sales at Rs 4.440 billion during FY06, the year under review, as against Rs 3.504 billion in the previous year FY05 registering 26.7% growth YoY. Sales growth was commendable but the growth of 62.6% in gross profit was even more creditable. Higher volume sales entailed higher distribution cost and administrative expenses other operating expenses were also higher. Finance cost was too high. Even then, pretax profit was 42.2% higher at Rs 390.9 million as against Rs 274.9 million in FY05.
Despite higher pretax profit the company suffered sharp fall in the profit at the bottom line as net profit after taxation in FY06 at Rs 132.7 million was 51% lower than Rs 270 million in FY06.
The leadership in the company has set their eyes on the heavy-duty commercial vehicles as these will be required for construction of mega projects. The emphasis is also an environment friendly CNG vehicles.
Ghandhara Nissan Limited was incorporated on August 8, 1981 in Pakistan as a private limited company and subsequently converted into a public limited company on May 24, 1992. The registered office of the company is situated at Ghandhara House, 109/2 Clifton. Its manufacturing facilities are located at Port Qasim, Karachi and its shares are listed on the Karachi Stock Exchange.
Its principal activity is assembly/progressive manufacture of Nissan passenger cars, trucks and busses, import and marketing of Nissan vehicles and assembly of other vehicles under contract agreement.
As regards ownership of its equity, Bibojee Services (Private) Ltd with 62.32% of its shares is its holding company. Nissan Diesel Motor Company Ltd, Japan holds 8.1% and National Bank of Pakistan, Trustee Department (NIT) owns 12.1% stock of the company. The directors and the members of their family own 3.45% and other individual shareholders from local general public own 12.3% of the company's stock. Remaining shares are held by other institutional and foreign investors.
The company's shares are trading at relatively high value as during the last one year market value of the share remained between Rs 22.50 and Rs 49.65 per share. Recently on 8-1-2007 the closing price of the share was quoted at Rs 25 per share which carries 150% premium over the par value.
According to the six year's financial and operating statistics published in Annual Report 2006, the company announced dividend only once, last year FY05, at 12.5%. This was because the company had relatively large capital deficiency between FY01 and FY03. The company had also accumulated loss last year.
But during the last three years the company's gross profit and sales turnover registered significant growth. The Chairman of the Board of the company, Raza Kuli Khan Khattak in his review dealt at great length about Pakistan's economy and the automobile industry as well as his company's operations. He said that Pakistan's economy expanded during the year despite the earthquake and high oil prices. At the same time he noted that easy availability of credit and leasing facilities and increased remittances helped in the overall growth of automobile sector.
But he emphasised that the reduction of tariff on CBU Cars coupled with 2% per month depreciation allowance against 1% on used cards imported under transfer of residence and Gift Scheme will affect the local industry.
He is satisfied with performance of his company in terms of turnover and other operating results. The overall turnover of the company crossed Rs 4 billion. Besides Nissan Trucks and Busses, the company also produced 1183 vehicles of Land Rover 4x4 vehicles and 549 Chevrolet 1000 cc cars under contract Assembly Agreements with Sigma Motors (Pvt) Ltd and Nexus Automotive (Pvt) Ltd.
Apart from manufacturing activities the company continued to sell different models of Nissan passenger cars and SUV's in CBU condition during the year.
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Performance Statistics (Million Rupees)
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30th June 2006 2005
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Share Capital-Paid-up: 450.02 450.02
Share Premium: 40.00 40.00
Accumulated Profit/(Loss): 42.16 (68.66)
Shareholders Equity: 532.18 421.36
Surplus on Revaluation
of Fixed Assets: 300.90 335.27
L.T. Debts: 329.75 521.99
L.T. Deposits: 15.61 15.61
Deferred Liabilities: 202.80 53.61
Current Liabilities: 1,479.73 1,311.00
Fixed Assets: 979.15 1,024.98
L.T. Deposits: 5.16 2.38
L.T. Prepayment: - 5.40
Current Assets: 1,876.66 1,626.08
Total Assets: 2,860.97 2,658.84
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Sales, Profit & Payout
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Net-Sales: 4,440.21 3,504.21
Gross Profit: 620.24 381.52
Operating Profit: 497.43 297.48
Other Operating Income: 20.42 27.49
Finance (Cost): (101.08) (34.55)
Depreciation: (99.66) 96.16
Profit Before Taxation: 390.89 274.85
Profit After Taxation: 132.71 270.05
Dividend Cash (%): - 12.50
Earnings Per Share (Rs): 2.95 6.00
Share Price (Rs) on 08/01/07: 25.00 -
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Financial Ratios
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Price/Earning Ratio: 8.47 -
Book Value Per Share: 11.83 9.36
Price/Book Value Ratio: 2.11 -
Debt/Equity Ratio: 28:72 41:59
Current Ratio: 1.27 1.24
Asset Turn Over Ratio: 1.55 1.32
Days Receivables: 28 6
Days Inventory: 128 155
Gross Profit Margin (%): 13.96 10.89
Net Profit Margin (%): 2.98 7.71
R.O.A. (%): 4.63 10.16
R.O.C.E. (%): 9.60 20.03
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PLANT CAPACITY
Against the designed annual production capacity of 6000 vehicles at car plant, on single shift basis, the company has assembled 1,732 vehicles of Land Rover and Chevrolet 1000 cc cars and also processed 2,712 truck cabs through paint shop.
Due to change in model, the company is planning to introduce new Nissan Sunny passenger car, consequently the plant capacity remained under utilized.
Against the production capacity of 2,500 Trucks and busses on single shift basis, the company produced 2,712 trucks and busses of Nissan and Isuzu. The excess production has met through additional working hours.
COMPANY INFORMATION: Chairman: Raza Kuli Khan Khattak; President: Lieutenant General Ali Kuli Khan Khattak (retd); Chief Executive: Ahmed Kuli Khan Khattak; Director: Chaudhry Sher Muhammed; Company Secretary: Aqiel Amjad Ghani; Chief Financial Officer: Muhammad Saleem Baig; Registered Office: Ghandhara House, 109/2 Clifton Karachi; Factory: Truck/Car Plants Port Bin Qasim Karachi; Website: Not Reported.
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