Textile Composite: KOHINOOR MILLS LIMITED: (FORMERLY KOHINOOR WEAVING MILLS LIMITED) - Half Year Ended December 31 2006

It is a public limited company engaged in the manufacture and sale of greige cloth. Its operation companies several divisions namely Weaving Division, Dyeing Division, Hosiery Division, Genertek Division, Hometex Division.
The company was incorporated in 1987, listed at the Karachi Stock Exchange in 1990 and its shares carry high premium while trading at in the stock market. For example, on July 23, 2007, closing price of the share was recorded at Rs 27.50 bearing 175% premium at the par value.
According to the share statistics of last 52 weeks, published in the Daily Business Recorder, market value of the share ranged between Rs 24.70 and Rs 31.05 per share. During the first half of the financial year from July 2006 to June 2007 (HYD 06-07), the company generated sales in terms of value at Rs 4.040 billion as compared to Rs 2.989 billion posted in the same period last year (SPLY) showing commendable growth of 35.2%.
But gross profit growth was even more creditable as during the period under review, gross profit increased by 82.1% to Rs 637.56 million (SPLY: Rs 350.02 million). Gross profit to sales ratio (GP Margin) increased by 4.06 percentage points over the corresponding period last year.
Operating expenses, such as administrative expenses and distribution expenses were on the higher side and other operating income was on the lower side. Its finance cost shot up by 53% to Rs 263.15 million from Rs 171.96 million in the preceding year's first half year.
Profit before tax for the half year was Rs 113.04 million as compared to loss before tax at Rs 18.11 million booked in the SPLY. During the 1st quarter ended September 30, 2006 (Q1 06-07) it had booked net loss after tax at Rs 7.9 million while during Q2 06-07 profit after tax was posted at Rs 87 million, closing cumulative half year profit after taxation at Rs 79.14 million as compared to loss after taxation of Rs 46 million in the SPLY.
The directors attributed the turnaround in operations and profitability to the increased capacity utilization in home textile, hosiery and dyeing divisions. As pointed out earlier gross profit margin was also on the higher side. Administrative and distribution costs in absolute terms although on the higher side but as ratio to sales, were lower.
The company has structured its debts and expensive loan has been swapped with softer LTF loans.
Investment in BMR continues, diversification in customer base is underway.

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Performance Statistics                         (Mln Rs)

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Balance Sheet: ---As At--    December 31        June 30

                                    2006           2006

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                              Un-audited        Audited

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Share Capital Paid-up:            800.00         800.00

Reserves:                         908.55         904.68

Shareholders Equity:            1,708.55       1,704.68

L.T. Debts:                     1,180.02       1,438.96

Current Liabilities:            4,961.87       4,679.88

Fixed Assets Tangible:          3,934.24       4,099.63

Intangible Fixes Assets-Software:   5.44           5.00

L.T. Investment:                   10.64          11.94

L.T. Security Deposits:             3.12           3.12

Current Assets:                 3,897.00       3,703.83

Total Assets:                   7,850.44       7,823.52

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Profit & Loss A/c for Half Year Ended

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---December 31---                   2006           2005

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Sales:                          4,040.95       2,988.58

Gross Profit:                     637.56         350.02

Other Operating Income:             8.99          19.44

Operating Profit:                 376.19         153.85

Finance (Cost):                  (263.15)        171.96

Profit/(Loss) Before Taxation:    113.04        (18.11)

Profit/(Loss) After Taxation:      79.14        (46.38)

Earnings Per Share (Rs):            2.18           1.28

Share Price (Rs) on 23/07/07:      27.50              -

Price/Earning Ratio:               12.61              -

Debt/Earning Ratio:                41:59          46:54

Current Ratio:                      0.79           0.79

Gross Profit Margin (%):           15.77          11.71

Net Profit Margin (%):              1.96         (1.55)

R.O.A. (%):                         1.01         (0.59)

R.O.E. (%):                         2.73           1.47

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