During the year under review the company's net sales at Rs 1.162 billion were marginally higher as compared to Rs 1.148 billion in the preceding year, FY05. But gross margin remained under pressure, and financial charges were on the higher side. Resultantly pretax profit was much lower than last year's.
Almost static sales was due to sudden closure of one of its furnaces caused by sudden drop of gas pressure.
But last year's net profit after taxation had declined due to higher tax provision. Hence the profit after taxation in FY06 became slightly higher than last year's.
The directors did not recommend dividend as they stated that profit availability for distribution was lower.
The company has been taking pro-active steps by expanding the production facilities in both glass containers plant and in plastic division. While explaining the future outlook the directors emphasised that the good part of the business was that the company had already signed contacts for the coming year sales both in local and international market. In case of plastic shells they have already booked 80% of total year's capacity.
The company's 30% right issue was subscribed. Its share is trading at Rs 11 per share carrying 10% premium.
Balochistan Glass Limited is a public limited company incorporated in 1980 in the province of Balochistan having its registered office located at M.A. Jinnah Road Quetta. Its shares are listed on the Karachi and Lahore Stock Exchanges. The company is engaged in manufacturing and sale of glass containers and plastic shells.
Its head office is located in Karachi and regional office is in Lahore. The URL of its website is www.balochistanglass.com and its share registrars are THK Associates (Pvt) Ltd in Karachi.
Its manufacturing facilities are located in three places in two provinces in Balochistan and Punjab. Unit No I is located at Hub Industrial Estate Balochistan, Unit II is located at 29 km, Lahore Sheikhupura Road, Sheikhupura. The Unit III is located in Lahore at 12 km Sheikhupura Road.
The annual rated production capacity of the glass container plant is 108.5 thousand tonnes against which FY06 (the year under review) production was recorded at 83.3 thousand tonnes achieving 76.7% capacity utilisation FY06 production of glass containers was 8.7% lower compared to FY05 production of 91.2 thousand tonnes, achieving capacity utilisation of 91.2%. Production of glass containers remained lower due to closure of furnace (Unit II) for almost a quarter of the year, for rebuilding. The company directors related the situation at great length. This was unplanned closure of furnace at Unit II in January 2006. It happened due to sudden drop of gas pressure and frequent stoppages of gas supply which caused thermal shock to furnace resulting in leakage of glass from black wall of the furnace. In April 2006 repair work was completed and restarted commercial production.
According to the company directors it became a priority company in the region due to its green glass campaign at Unit I throughout the year. Due to high demand the unit was converted to amber for a short period and to flint glass at the time of closure of Unit No II. They also stated that Unit III remained satisfactory during the year.
Another unit of power generation was installed during the year to bring saving in the energy cost.
As regards the performance of plastic division, it was satisfactory especially after the addition of 3rd Injection Moulding Machine with related mould. After induction of new machine, production capacity increased by 80%.
As regards future outlook, the company has added machinery based on new technology to cater to the consumer's behaviour pattern in the soft drink industry.
On the other hand demand of plastic shells is growing at much faster pace than foreseen earlier. Accordingly it is bringing 4th machine in the production line.
During the year under review the company generated sales at Rs 1.162 billion as compared to Rs 1.148 billion in FY05 showing marginal increase over the preceding year's. Financial charges sharply increased. On top of it gross profit was much lower. Resultantly, pretax profit in FY06 went down to Rs 27 million from Rs 62.99 million in the previous year.
But last year's provision for taxation was relatively higher. So at the bottom line FY06 after tax profit was slightly higher at Rs 25.86 million compared to FY05 after tax profit of Rs 24.19 million.
========================================================
Performance Statistics (Million Rupees)
========================================================
30 June 2006 2005
========================================================
Share Capital Paid-up: 429.00 330.00
Un-appropriated Profit: 26.97 1.11
Shareholders Equity: 455.97 331.11
Subordinated Loan-Unsecured: 384.03 380.79
Other L.T. Debts: 361.09 444.70
Deferred Liabilities: 78.46 78.03
Current Liabilities: 1,086.92 834.02
Tangible Fixed Assets: 1,209.24 1,014.10
L.T. Deposits: 19.48 30.32
Current Assets: 1,137.75 1,024.23
Total Assets: 2,366.47 2,068.65
--------------------------------------------------------
Sales, Profit & Payout
--------------------------------------------------------
Sales-Net: 1,162.19 1,148.49
Gross Profit: 227.93 263.06
Operating Profit: 146.92 158.12
Finance Charges: (127.74) (98.77)
Other Income: 9.25 6.96
(Depreciation): (96.78) (93.78)
Profit Before Taxation: 27.00 62.99
Profit After Taxation: 25.86 24.19
Earnings Per Share (Rs): 0.77 0.72
Dividend Cash: - -
Market Price of Share
(Rs) on 15/01/07: 11.00 -
--------------------------------------------------------
Financial Ratios:
--------------------------------------------------------
Price/Earning Ratio: 14.29 -
Book Value Per Share: 10.62 10.03
Price/Book Value Ratio: 1.04 -
Debt/Equity Ratio: 30:70 38:62
Current Ratio: 1.05 1.23
Assets Turn Over Ratio: 0.49 0.55
Days Receivables: 65 65
Days Inventory: 217 213
Gross Profit Margin (%): 19.61 22.90
Net Profit Margin (%): 2.22 2.11
R.O.A. (%): 1.09 1.17
R.O.C.E (%): 2.02 1.96
--------------------------------------------------------
Plant Capacity & Production: (Figures in 000's)
--------------------------------------------------------
Glass Containers (Tons)
Annual Capacity: 108.50 108.50
Production: 83.26 91.20
Capacity Utilization (%): 76.74 84.05
--------------------------------------------------------
Plastic Shells (Pieces)
--------------------------------------------------------
Full Depth
Annual Capacity: 900.00 500.00
Production: 809.20 493.57
Capacity Utilization (%): 89.91 98.71
--------------------------------------------------------
Half Depth
--------------------------------------------------------
Annual Capacity: 800.00 800.00
Production: - -
Capacity Utilization (%): - -
========================================================
NOTEKeeping in view of the market requirement, production of half depth shells has been stopped while only full depth shells were produced. Production of glass containers remained at low level due to closure of furnace (unit II) for almost a quarter, for rebuilding.
COMPANY INFORMATION: Chairman: Mohammad Rehman; Chief Executive: Tariq Siddiq Paracha; Director: Shazia Tariq Paracha; Company Secretary: Imran Ahmed Khan; Registered Office: Firdousi Manzil, Rustamji Lane; M.A. Jinnah Road Quetta (Balochistan); Website: www.balochistanglass.com Head Office: D-66, Block-9, Chaudhry Khaliquz Zaman Road Clifton Karachi; Factories: Unit I Plot No 8, Sector M. HITE, Hub District Lasbella Balochistan; Unit II 29 KM Lahore Sheikhupura Road Sheikhupura; Unit III 12 KM Sheikhupura Road, Kot Abdul Malik, Lahore.
Comments
Comments are closed.