Textile Spinning: FAZAL CLOTH MILLS LIMITED - Half Year Ended December 31, 2006
This is a textile spinning unit engaged in the manufacture and sale of yarn and its manufacturing facilities are located at two districts of Punjab province ie Muzaffargarh and Multan.
Fazal Cloth Mills Ltd, at present owns and operates 4 spinning plants comprising 146,760 spindles and two gas fired power generation plants. The company was listed on the Karachi Stock Exchange in 1970, it is also listed on the Lahore Stock Exchange.
According to its website, since its listing the company has maintained a regular dividend pay out, paying cash dividends or bonus shares for 26 years out of 35 years it has been listed. Average dividend/bonus pay out for the last five years is 11.5%.
For the period ended December 31, 2006, (HYD 06-07) the company generated sales turnover at Rs 2.94 billion as against Rs 2.456 billion in the same period last year (SPLY), registering commendable 19.71% growth. However the rate of increase in the gross profit remained subdued as gross profit amounted to Rs 391.25 million (SPLY: Rs 378.79 million) showing increase by 3.3%. Gross profit to sales ratio (GP Margin) during the period under review reduced to 13.31 percent from 15.42% in the SPLY.
As regards the rate of increase in net profit was also minimal as compared to increase in sales. Pretax profit in HYD 06-07 amounted to Rs 101.38 million (SPLY: Rs 95.66 million) and net profit after taxation amounted to Rs 79.13 million (SPLY: Rs 77.47 million) showing increase by 5.98% and 2.1% respectively as compared to the corresponding figures in the SPLY.
The directors of the company pointed out that there was increase in natural gas tariff by SNGPL, 33% increase in minimum wage by GoP, and higher interest costs.
According to them the outlook for the remaining half year is also not promising as yarn prices remain under pressure.
According to them hefty subsidies and support provided by India, Bangladesh and China to their domestic textile industries, higher production costs and inflation rate in Pakistan as well as lower production of cotton in Pakistan make the country's textile industry non-competitive in the international market. They also emphasized that the government must take steps to provide a level playing field to textile industry in Pakistan for the healthy operation and progress of this crucial and important industry.
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Performance Statistics (Million Rupees)
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Balance Sheet -As At-
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December 31 June 30
2006 2006
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Un-audited Audited
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Share Capital-Paid-up: 437.55 413.09
Reserves & Surplus: 825.79 771.12
Shareholders Equity: 1,263.34 1,184.21
L.T. Debts: 1,426.55 1,398.39
Deferred Liabilities: 168.61 168.07
Bills Payable: 335.95 335.94
Custom Duties: 49.72 46.48
Current Liabilities: 3,097.98 2,014.92
Fixed Assets Tangible: 2,725.95 2,569.82
Intangible Assets: 3.98 4.14
L.T. Investments: 252.97 252.97
L.T. Loans: 0.12 0.32
L.T. Deposits: 5.71 5.71
Current Assets: 3,353.51 2,315.05
Total Assets: 6,342.15 5,148.01
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Profit & Loss A/c for Half Year -December 31
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2006 2005
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Sales: 2,939.72 2,455.70
Gross Profit: 391.25 378.79
Other Operating Income: 0.18 0.92
Profit from Operations: 266.25 251.79
Finance (Cost): (164.88) (156.14)
Profit Before Taxation: 101.38 95.66
Net Profit After Taxation: 79.13 77.47
Earnings Per Share (Rs): 4.22 4.13
Share Price (Rs) on 19/06/2007: 40.00 -
Price/Earning Ratio: 9.47 -
Debt/Equity Ratio: 53:47 54:46
Current Ratio: 1.08 1.15
Gross Profit Margin (%): 13.31 15.42
Net Profit Margin (%): 2.69 3.15
R.O.A. (%): 1.25 1.50
R.O.E. (%): 6.26 6.54
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COMPANY INFORMATION: Chairman & Chief Executive officer: Sh. Naseem Ahmed
Directors: Amir Naseem Sheikh, Rehman Naseem; Chief Financial Officer: Faizan-ul-Haq; Company Secretary: M.D. Kanwar; Registered Office: 16-Bank Square Lahore
Website URL: www.fazalcloth.com; Mills: Fazal Nagar, Jhang Road, Muzaffargarh (Punjab); Qadirpur Rawan Bypass, Khanewal Road Multan (Punjab).
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