During the year under review, this relatively modest entity of engineering sector has been able to achieve excellent results in production and sales. To ensure continuity in business it has added new assets of substantial amount. Not only it is adding new products in its portfolio of spare parts but also it is taking bold decisions for long-term business goals.
In this context it has made detailed research and evaluation of various products and has made strategic decision to set up a project for the manufacture of a 4-stroke CNG "Auto Rickshaw". In this connection the Board of Directors of the company has approved a sum of Rs 150 million to cater to the needs of this project.
On the other hand the company is looking towards increasing its business in wheel rims for tractors as the tractor assemblers have substantial orders to manufacture tractors which in turn would increase the demand for tractor wheel rim.
During the year, the company registered record high sales and posted net profit after taxation at Rs 25.87 million (2004: Rs 18.80 million) registering impressive growth of 38%.
Sazgar Engineering Works Ltd was incorporated in the province of Punjab in September 1991 as a private limited company. It was converted into public limited company in November 1994 and was listed on Karachi Stock Exchange Ltd in 1996. But the company is listed on all stock exchanges of Pakistan ie Karachi, Lahore and Islamabad. Its registered office is situated at Ali Town, Thokar Niaz Beg Raiwind Road, Lahore.
Sazgar Engineering Works Ltd is engaged in the manufacture and sale of autoparts and household electric appliances. Its manufacturing facilities are located at 18 km Raiwind Road Lahore.
As regards ownership of the company's equity, overwhelming majority shares are held by its directors, their spouse and minor children. They held 69.3% of the company's total 7.16 million paid up shares of the company. The local investors hold 15.1% of the company's stock. Remaining shares are owned by institutional investors.
The market value of its share has been substantially high during the last one year as the highest/lowest prices during the period ranged within Rs 18.10 and Rs 28.50 per share. On 15th December quotation of the share at the closing session was recorded at Rs 26.95 per 10-rupee share.
During the financial year 2004-05, the company posted sales in the sum of Rs 290.5 million as against Rs 217.0 million in the preceding year registering 33.8% growth. Sales has been improved mainly due to increase in volume sales which were well supported by the production line.
The directors emphasise that the company's policy is to add new products which has been instrumental in boosting the sales volume. From the performance statistics appended with this write-up, it can be seen at a glance that the company's product portfolio comprises six types of auto parts and out of this portfolio the largest number of components produced were wheel-rims. During the year under review the company manufactured 111,041 wheel rims as compared to 103,050 produced in the preceding year showing 7.8% increase.
During the year, a new wheel rim from Delta Star Trucks was added to the production line. According to the directors, the induction of facility to manufacture those rims opened a new era for the wheel rims of fast moving vehicles. The commercial production of these wheel rims started in the last quarter of the year under review.
During the year under review, a 750 Kva CNC Flash Butt Welding machine valuing Rs 22.30 million was imported under finance lease. This machine would help in increasing production capacity of the plant substantially.
During the year sales volume from its business segment of import and marketing of finished home appliances contributed significantly towards the increase of sales value which increased by 10.3%.
During the year under review the company made additions in the fixed assets in the sum of Rs 39 million (2004: Rs 12.3 million).
As regards future outlook the company has set its eyes towards the increased sales of wheel rims of tractors as the farmers are getting incentive to acquire tractors.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital Paid-up: 71.63 71.63
Accumulated Profit/(Loss): 10.82 (15.05)
Shareholders Equity: 82.45 56.58
L.T. Debts: 13.72 6.71
Deferred Liabilities: 9.02 7.95
Current Liabilities: 90.28 65.21
Fixed Assets: 89.38 67.89
L.T. Security Deposits: 0.72 0.72
Current Assets: 105.37 67.84
Total Assets: 195.47 136.45
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Sales, Profit & Payout
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Sales: 290.49 217.02
Gross Profit: 45.69 43.42
Operating Profit: 31.46 32.53
Other Operating Income: 1.28 0.02
Finance (Cost): (3.06) (3.51)
(Depreciation): (7.93) (5.24)
Profit Before Taxation: 29.68 29.04
Profit After Taxation: 25.87 18.80
Earnings Per Share (Rs): 3.61 2.62
Dividend: - -
Share Price (Rs) on 15-12-2005: 26.95 -
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Financial Ratios
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Price/Earning Ratio: 7.46 -
Book Value Per Share: 11.51 7.90
Price/Book Value Ratio: 2.34 -
Debt/Equity Ratio: 14:86 11:89
Current Ratio: 1.17 1.04
Asset Turnover Ratio: 1.49 1.59
Days Receivables: 28 23
Days Inventory: 89 30
Gross Profit Margin (%): 15.73 20.01
Net Profit Margin (%): 8.90 8.66
R.O.A (%): 13.24 13.78
R.O.C.E. (%): 24.59 26.39
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Plant Capacity & Production
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Installed Capacity
------------------------------------------------------"The capacity of the plant and machinery is
indeterminable due to the versatility
of production."
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Actual Production (Numbers)
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Auto Parts
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Wheel-Rims 111,041 103,050
Body Front Axle 1,969 2,160
Fuel Tank 3,495 4,100
Member Floor Assembly 6,414 4,900
Panel Back Window 2,854 2,750
Console Penal 409 75
Washing Machines (Hoover Brand) 5 94
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