Automobile Parts & Accessories: EXIDE PAKISTAN LIMITED - Year Ended 31-03-2007
According to its 10 years performance highlights the company's sales maintained upward growth trend. It has two distinct business segments. Chemicals and batteries.
However its core business batteries contribution to sales and gross profit remained overwhelming. On the other hand automotive batteries demand increased while industrial batteries demand declined.
The company is diversifying by setting up sulphuric acid manufacturing plant at Port Qasim Industrial Area Karachi. Its subsidiary company has higher pretax profit. During the year under review the company earned net profit after taxation at Rs 91.64 million (last year: Rs 57.30 million) which translates into EPS (Earning Per Share) at Rs 16.95 which is an improvement of Rs 6.35 per share over last year's EPS of Rs 10.60 per share.
On July 12, 2007, the closing price of Exide Pakistan share was recorded at Rs 178 per share which is nearly 18 times of the par value. At this share price the PER (Price Earning Ratio) works out to more than 10 multiple of EPS and it reflects rising confidence of the investors in this enterprise.
The chairman has positive outlook for the company's future.
Exide Pakistan Limited was incorporated in 1953 as a private limited company in association with Chloride Group Plc of United Kingdom. The Group had its presence in 35 countries through its associates and was supported by Chloride Technical. The registered office of the Pakistani company is located at Karachi, it was listed in 1982 on the Karachi Stock Exchange and is also listed on the Lahore Stock Exchange.
The company is primarily engaged in the manufacture and sale of automotive batteries, industrial cells, chemicals and acid.
The name of Exide batteries in the automotive industry is well known for reliability and performance. These batteries are available in different ranges according to the usage and performance for cars, trucks, planes, heavy trollers.
It also specialises in the industrial batteries which include flat plate, lead acid stand by and power batteries. Exide industrial batteries are being used by reputed organisations because of dependable service. Some of its salient features are transparent and containers to facilitate monitoring of cell condition and electrolyte level visually, low maintenance longer life, minimum self discharge characteristics etc.
The company is also famous for engine starting batteries for railway locomotives, stationary, engine, marine engine and fire pumps. According to its website industrial batteries for telecommunication, Railways, Wapda and other standby applications are new and exclusive features of its business.
It also emphasised that Exide has the largest share of the market. Further more the inclusion of Automotive Battery Company Ltd (FB) in the group strengthens its standing in the market. With a view to diversifying its business, Exide Pakistan Ltd has set up sulphuric acid manufacturing plant at Port Qasim Industrial Area, Karachi.
It has the unique distinction of being the first battery manufacturer in Pakistan to be accorded ISO-9002 certification in recognition of the quality control and management systems being followed by the company.
Exide is a brand name known in South Asia for over a century. The company operates from Karachi and is backed by its regional offices in Karachi, Sukkur, Multan, Faisalabad, Lahore, Rawalpindi and Peshawar. These offices provide after sales service to all customers and are supported by a vast network of dealership all over the country.
During the financial year April 30, 2006 to March 31, 2007 (FY 06-07), the year under review, the company generated net sales in the sum of Rs 1.931 billion as compared to Rs 1.530 billion posted in the preceding financial year (05-06) registering 26.3% growth which is commendable growth rate.
The company accounts for segment reporting for its two products, chemicals and batteries. The contribution of battery segment in the company's net sales was 90.4% and of the chemical business segment was 9.6%. On the other hand the battery's contribution to gross profit was 85.8% and of chemical segment was the remaining 14.2%.
It is understood from the chairman's review that: Sales volume in the industrial division grew during the year as against last year. But sales volume in the industrial segment reduced due to decline in demand. There was sharp increase in the raw materials prices forcing the battery manufacturers to increase selling prices twice - in October 2006 and February 2007. The unorganised sector comprising replaters, smugglers and importers have sizable share of the market.
Against 26.3% rise in sales revenue, cost of sales increased by 27.6%. Gross profit to net sales ratio was lower at 16.26% as against 17.14% showing pressure on margins. Finance cost registered modest double digit percentage increase despite Kibor and working capital increased due to increase in major raw material prices.
The subsidiary company Automotive Battery Company Limited booked higher pretax profit at Rs 6.0 million as compared to Rs 4.5 million in the previous financial year
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Performance Statistics (Million Rupees)
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31 March 2007 2006
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Share Capital Paid-up: 54.06 54.06
Reserves & Surplus: 450.96 362.88
Shareholder's Equity: 505.02 416.94
Surplus on Revaluation
of Fixed Assets: 244.12 248.66
L.T. Debts: 60.00 80.00
Deferred Tax Liability-Net: 14.14 13.81
Current Liabilities: 479.88 393.70
Fixed Assets Tangible: 502.36 506.15
L.T. Investments: 32.53 25.53
L.T. Loans: 1.03 0.94
L.T. Deposits: 13.70 12.00
Current Assets: 753.45 608.49
Total Assets: 1,303.16 1,153.11
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Sales, Profit & Pay Out:
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Net Sales: 1,931.46 1,529.77
Gross Profit: 314.08 262.24
Other Operating Income: 11.17 3.71
Operating Profit: 172.77 126.97
Finance (Cost): (32.91) (29.64)
(Depreciation): (35.43) (29.25)
Profit Before Taxation: 139.86 97.33
Profit After Taxation: 91.64 57.30
Earnings Per Share (Rs): 16.95 10.60
Dividend Cash (%): 25.00 15.00
Share Price (Rs) on 12-07-2007 178 -
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Financial Ratios:
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Price/Earning Ratio: 10.50 -
Book Value Per Share: 93.52 77.12
Price/Book Value Ratio: 1.90 -
Debt/Equity Ratio: 7:93 10:73
Current Ratio: 1.57 1.54
Asset Turn Over Ratio: 1.48 1.32
Days receivables: 17 25
Days Inventory: 125 118
Gross Profit Margin (%): 16.26 17.14
Net Profit Margin (%): 4.74 3.75
R.O.A. (%): 7.03 4.97
R.O.C.E. (%): 11.13 7.54
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PRODUCTION CAPACITY:
NOTE: "The actual capacity of the battery plant cannot be determined as it depends on the proportion of different types of batteries produced which varies in relation to the consumer demand.
The installed capacity of the chemical plants is 33,000 MT (2006: 33,000 MT) per annum. The company's production during the year was according to market demand."
COMPANY INFORMATION: Chairman: Arif Hashwani; Managing Director & Chief Executive: S.I. Ahmed; Director: Hussain Hashwani; Chief Financial Officer & Company Secretary: S. Haider Mehdi; Registered Office: 40-K Block 6 Dr Mahmood Hussain Road off Shahrah-e-Faisal PECHS, Karachi-75400; Website URL: www.exide.com.pk
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