From the performance statistics appended with this write up it can be studied that the company has elaborate range of products in the Chemical Division and it has also Textile Division which is equipped with 45,408 spindles.
The Annual Report of the company has published the Board of Directors resolution to dispose off property, plant and equipment of spinning unit II of its Textile Division. It has been reasoned that the disposal is consistent with the company's long term strategy to focus on its core business activities ie, chemical division, develop additional capacity and improve production facilities.
The year under review has been highly rewarding for the shareholders as the company declared cash dividend at 70% which is its highest ever payout rate. This could be possible because the company registered record high sales and profit. The building of its strong fundamentals motivated the investors resulting in the market value of its share reaching at more than 12 times of the par value.
Sitara Chemical Industries Ltd is a company limited by shares, incorporated in Pakistan and quoted on all stock exchanges in the country.
The business of the company is operation of Chlor Alkali plant and spinning unit. These units are located at Faisalabad, Sheikhupura Road. The company is the flagship of Sitara Group of Industries head by Chairman Haji Bashir Ahmed who has pioneered application of Islamic mode of finance in the business process. He has also been conferred Sitara-i-Imtiaz by the President of Pakistan for excellence in socio-economic activities.
Some other affiliates of the Group are Sitara Fabrics Ltd, Sitara Textile Industries Ltd, Sitara Energy Ltd, Sitara International (Private) Ltd,
According to the pattern of the company's shareholding dated June 30, 2005, 61.32% of the company's total 18.55 million shares was held by the Director Muhammad Adrees who is also the Chief Executive Officer of the company. Its 1858 individual shareholders owned 16.9% of the company's stock. Remaining stocks were held mostly by institutions in the private sector.
On November 17, 2005, the market value of the company's share was recorded at Rs 122.90 per 10-rupee share for the closing quotation. This works out to more than 12 times of the par value. During the last one year market value of its share peaked at Rs 180 per share. The company has excellent track record of profit distribution for being regular and distributing at very attractive rates. During the last six years the company declared highest dividend @70% for the year under review and most of the years at 55%.
The financial health of the company has remained robust and robustness is most likely to sustain for many future years also. This is evidenced from the solvency and liquidity ratios, breakup value of the share, and rising trend in sales and profitability during the last seven years.
The company posted sales at Rs 3.942 billion (FY 2003-04: Rs 3.506 billion) during the year under review and the sales figure is the highest in the company's history. Production wise the revenue from caustic soda business works out to 57% of the total revenue. The business segment of yarn contributed 27% of the total revenue.
On the revenue application side fuel and power topped the list as it accounted for 38% of total application of revenue. This was followed by raw materials at 26% of total application of revenue.
Operating profit and pretax profit at Rs 707.56 million and Rs 487.71 million recorded increase of 45% and 32% respectively. This year export sales of the chemicals division reached Rs 107 million as against Rs 41 million in the preceding year. Most of the profit in export sales came from products developed as a result of internal R&D.
The company has revamped its existing Membrane-II production facility, mercury based caustic plant is aging hence discarded. Company is planning on a polyvinyl chloride (PVC Resin) plant of 60,000 MTD.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital-Paid-up: 185.54 185.54
Reserves: 1,287.64 1,033.58
Shareholders Equity: 1,473.18 1,219.12
Surplus on Revaluation of F/A: - 106.39
L.T. Debts: 663.61 296.85
L.T. Deposits: 13.96 13.63
Deferred Liabilities: 268.36 270.50
Current Liabilities: 1,203.10 1,144.85
Fixed Assets: 2,442.69 1,862.45
L.T. Loans & Advances: 1.13 1.37
L.T. Deposits: 20.46 14.50
Current Assets: 1,157.93 1,173.02
Total Assets: 3,622.21 3,051.34
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Sales, Profit & Pay Out
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Sales: 3,942.39 3,506.15
Gross Profit: 900.39 630.02
Operating Profit: 707.56 488.30
Other Operating Income: 9.09 9.83
Finance (Cost): (129.37) (98.27)
(Depreciation): (147.82) (184.63)
Profit Before Taxation: 487.71 370.65
(Loss) on Disposal Assets of
Discontinued Operations: (50.07) -
Profit After Taxation: 296.10 238.62
Earning Per Share (Rs): 15.96 12.86
Dividend Cash Rs/Shares: 7.00 5.50
Share Price (Rs) on 17/11/05: 122.90 -
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Financial Ratios
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Price/Earning Ratio: 7.70 -
Book Value Per Share: 79.40 65.71
Price/Book Value Ratio: 1.55 -
Debt/Equity Ratio: 31:69 18:82
Current Ratio: 0.96 1.02
Assets Turn Over Ratio: 1.09 1.15
Days Receivables: 23 31
Days Inventory: 38 44
Gross Profit Margin (%): 22.84 17.97
Net Profit Margin (%): 7.51 6.80
R.O.A (%): 8.17 7.82
R.O.C.E (%): 12.24 12.52
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A) Chemical Division
Plant Capacity & Actual Production (Figures in Thousand Tons)
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Designed Capacity Actual Production
2005 2004 2005 2004
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Caustic Soda 129.50 129.50 124.37 118.58
Capacity Utilisation (%): - - 96.03 91.56
Sodium Hypochlorite: 36.50 36.50 28.41 27.44
Capacity Utilization (%): - - 7 7.83 75.18
Bleaching Powder: 7.50 4.50 4.46 4.61
Capacity Utilization (%): - - 59.47 102.44
Liquid Chlorine: 8.00 8.00 8.18 8.07
Capacity Utilization (%): - - 102.25 100.88
Ammonium Chlorite: 3.00 3.00 2.54 2.92
Capacity Utilization (%): - - 84.67 97.33
Hydrochloric Acid: 110.00 110.00 109.12 90.52
Capacity Utilization (%): - - 99.20 82.29
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B) Textile Division
a. Plant Capacity & Production (Million Kgs)
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2005 2004
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Installed Capacity 20/s Count: 20.79 17.10
Production: 14.68 17.73
Capacity Utilization (%): 70.62 1 03.68
b) Number of Spindles Installed: 45,408 37,440
Number of Rotors Installed: - 432
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