This was another successful year for the company because of commendable rise in sales and profit as well as attaining more than 100% capacity utilization. This supported the company in strengthening its market share despite influx of under-invoiced priced products from the regional countries. This also helped the company in the announcement of cash dividend at higher rate of 50%.
The company posted profit after taxation at Rs 167.88 million as against Rs 83.95 million showing 200% increase over preceding year's. The company has gratifying record of regular announcements of dividends at attractive rates. Earnings per share of the company increased to Rs 5.60 in FY06 from Rs 2.30 per share in the preceding year.
Market value of its share remained quite high during the last 52 weeks as it ranged between Rs 48 and 109.95 per share. On May 15, 2006 the closing price of the share was quoted at Rs 105.50 per share which is more than 10 times of the par value. At this price its market capitalization has soared to Rs 3.165 billion from its paid-up capital of Rs 300 million.
It maintains robust financial health as evidenced from the financial ratio appended with this brief. Tri-Pack Films Ltd (Tri-Pack), a public limited company, is a joint venture between Mitsubishi Corporation of Japan and Packages Ltd, of Pakistan. The company was incorporated in Pakistan in 1993 and it commenced commercial production in 1995. It is listed on Karachi, Lahore and Islamabad stock exchanges.
Its principal area of business involves the manufacturing and selling of Biaxially Oriented Polypropylene (BOPP) films, a packaging material widely used in the consumer goods industry. BOPP films are used extensively for biscuits and cigarette packaging over-wrap, food products, medicines, confectionery, tea, adhesive tape and lamination. Tri-Pack Films Ltd is the largest film producer in Pakistan.
Its production facilities are located in Hattar Industrial Estate in the NWFP and North Western Industrial Zone Port Qasim Karachi (Sindh). Its head office is in Karachi and its regional sales offices are in Karachi, Hattar and Lahore. The company assured that it maintains high quality standard and is ISO 9001:2000 and ISO 14001 certified.
The Pakistan Credit Rating Agency (Pvt) Ltd (Pacra) an affiliate of IBAC Limited UK assigned the company a long-term rating of 'A+' and a short term rating of "A1" (single A one). This conforms a strong capacity of the company for timely payments its financial commitments.
As regards production facilities, in 1993 at Hattar Industrial Estate the company started its operations with one plant with the production capacity of 5,400 tonnes finished BOPP films per annum and further added another production line attaining total 10,800 tonnes annually in 2001. In 2004 the company installed its third manufacturing line of 16,000 tonnes per annum at Port Qasim Industrial Zone increasing the total capacity to 26,800 tonenes.
Tri-pack's BOPP films are the products of state of the art technology. Its packaging film is available in four different grades ie plain composite pearlized and metalized and its thickness ranges between 12 to 60 microns. The principal properties of the company's products are: good barrier to moisture; clarity and gloss; good printability; good sealability.
During the financial year ended December 31, 2006 the year under review (FY06), all three production lines were run to their full production capacity level. This enabled the company to attain 101% utilization of the rated capacity which supported strengthening of its market share.
Its sales, net of sales tax, in FY06, amounted to Rs 3.826 billion (FY05: Rs 2.998 billion) showing commendable increase of 27.59% YoY. This performance should be judged against the backdrop of continued supply of BOPP film from the regional countries at under invoiced prices. In this connection the directors of the company assured that they were taking up this issue at all available forums to curtail this 'malpractice' and to ensure level playing field. In FY06, the company's gross profit amounted to Rs 508.77 million (FY05: Rs 349.66 million) reflecting 45.5% increase. This extraordinary increase in the gross profit amount, appears to be due to increase in volume sales as well as better gross margin. The FY06 gross profit margin increased 1.64 percentage points from FY05 GP margin of 11.66% to 13.30% of FY06.
Distribution expenses increased substantially which was possibly due to rise in volume sales as well as inflationary effect. But it is good to see that administrative expenses increased only marginally. On the other hand finance cost was on much higher side, obviously due to increased requirement of working capital finance and increase in mark-up rate of the bank borrowings. Profit before taxation at Rs 244.26 million increased by 103% over FY05 figure of Rs 120.46 million. But FY06 figure was 2nd highest of last nine years.
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Performance Statistics (Million Rupees)
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31 December 2006 2005
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Share Capital-Paid-up: 300.00 300.00
Reserves: 782.06 689.16
Shareholders' Equity: 1,082.06 989.18
L.T. Debts: 756.00 972.00
Deferred Taxation: 99.59 42.41
Accumulated Compensated Absences: 4.84 1.48
Current Liabilities: 869.80 752.91
Fixed Assets Tangible: 1,703.97 1,879.30
L.T. Deposits: 0.86 1.05
Current Assets: 1,107.46 877.63
Total Assets: 2,812.29 2,757.98
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Sales, Profit & Payout:
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Net Sales: 3,825.64 2,998.39
Gross Profit: 508.77 349.66
Operating Profit: 380.96 231.75
Other Income: 11.99 12.11
Finance (Cost): (130.60) (117.06)
(Depreciation): (228.58) (225.46)
Profit Before Taxation: 244.26 120.46
Profit After Taxation: 167.88 83.95
Earnings Per Share (Rs): 5.60 2.30
Dividend Cash: 50.00 25.00
Share Price (Rs) on 15/05/2007: 105.50 -
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Financial Ratios:
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Price/Earning Ratio: 18.84 -
Book Value Per Share: 36.07 32.97
Price/Book Value Ratio: 2.92 -
Debt/Equity Ratio: 41:59 50:50
Current Ratio: 1.27 1.16
Assets Turn Over Ratio: 1.36 1.09
Days Receivables: 44 48
Days Inventory: 30 43
Gross Profit Margin (%): 13.30 11.66
Net Profit Margin (%): 4.39 2.80
R.O.A (%): 5.96 3.04
R.O.C.E (%): 8.64 4.18
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Plant Capacity & Actual Production (000' Tones)
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Operational Capacity at year end: 26.800 26.800
Operational Capacity Available
during the year: 26.800 26.800
Production: 27.031 23.506
Capacity Utilization (%): 100.86 87.70
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COMPANY INFORMATION: : Chairman: Syed Babar Ali; Chief Executive: Shahid Hussain; Director: Masaharu Domichi; Company Secretary: Adi J. Cawasji; Chief Financial Officer: Saeed Iqbal; Registered Office: 4th Floor The Forum Block 9 Clifton Karachi. Head Office & Works: Plot No G-1, G-4 North Western Industrial Zone Port Qasim Karachi; Works & Sales Office: Hattar Industrial Estate NWFP Regional Sales Offices; Karachi: Marine Pride Block-7 Clifton Karachi, 75600; Lahore: 305, Siddique Trade Centre Gulberg II Lahore; Website: www.tripack.com.pk
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