Sugar & Allied Industries: THE THAL INDUSTRIES CORPORATION LIMITED - Half Year Ended March 31 2007

The company is classified as one of the constituents of Sugar & Allied Industries Sector. The Thal Industries Corporation Ltd factory is located in Layyah so also its name is known as Layyah Sugar Mills.
It is one of the oldest sugar mills as it was incorporated 54 years ago. Its shares are listed on the Karachi, Lahore stock exchanges. During the first half of the financial year October 06 to September 07 (HYM 06-07) the company's sales and profitability substantially improved. Gross profit was on the higher side and finance cost were lower compared to the same period last year (SPLY). Administrative and General Expenses only marginally escalated while selling expenses were around the figure of SPLY.
Looking from other angle, it would be seen that the ratios of these expenses to sales revenue were lower than the ratios of SPLY. Productively in the industry, more so in the sugar industry is the critical indicator and reason of the quantum of profit.
During the period ended March 31, 2007, the company's sugar crushing output increased to 755.33 thousand M. Tons as against 655.51 thousand M. Tons in the SPLY registering 15.2% increase.
In this period output of sugar was recorded at 66.28 thousand M. Tons (SPLY: 51.79 thousand tons) at an average recovery of 8.838 percent (SPLY: 7.905%). As regards supply situation of sugarcane, the directors explained that like previous year, there was shortfall in sugarcane crop as required by mills all over the Punjab, therefore, the neighbouring mills had been purchasing sugarcane at higher price within the zone area of the company which affected the company's cane procurement. Consequently, the company also had to purchase sugarcane at a higher price within and outside of its zone area.
Increase in sugar recovery percentage was mainly due to its related sugarcane development programme. It was reported that the management was continuously providing mark-up free loan for quality seed, fertiliser, pesticides and cost free services of biological, laboratory at the doorstep of the cane growers.
During the period under review the company earned net profit, after tax at Rs 45.13 million (SPLY: Rs 8.47 million) achieving 433% increase which is commendable.

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Performance Statistics                         (Mln Rs)

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Balance Sheet ---As At---       March 31   September 30

                                    2007           2006

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                              Un-audited        Audited

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Share Capital Paid-up:            150.23         150.23

Reserves & Surplus:               135.37         105.26

Shareholders Equity:              285.60         255.49

Loans from Directors:             603.00         603.00

Other L.T. Debts:                     -           10.90

Deferred Liabilities:              50.74          51.04

Current Liabilities:            1,172.76         257.18

Fixed Assets Tangible:            633.50         660.82

L.T. Security Deposits:             5.01           5.01

Current Assets:                 1,473.59         511.78

Total Assets:                   2,112.10       1,177.61

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Profit & Loss A/C for Half Year Ended

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---March 31---                      2007           2006

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Sales-Net:                        701.00         536.64

Gross Profit:                     113.99          60.18

Operating Profit:                  89.19          38.52

Other Income:                       1.59           0.56

Finance (Cost):                   (17.69)       (25.34)

Profit Before Taxation:            69.43          13.03

Profit After Taxation:             45.13           8.47

Earnings Per Share (Rs):            3.00           0.56

Share Price (Rs) on 23/07/07:      35.60              -

Price/Earning Ratio:               11.87              -

Debt/Equity Ratio:                 0:100           1:99

Current Ratio:                      1.26           1.99

Gross Profit Margin (%):           16.26          11.21

Net Profit Margin (%):              6.43           1.58

R.O.A. (%):                         2.14           0.72

R.O.E. (%):                         4.80           0.92

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