This subsidiary of Swiss multinational corporation has maintained upward trend in sales and profitability. The achievement looks all the more impressive if judged in the backdrop of immense pressure on its petroleum based raw material.
The promise to shareholders seem to have been redeemed as the directors declared all time high profit distribution of 180%. There will be change in the composition of the Board of Directors with effect from April 1, 2006 as Mujtaba Rahim will succeed as Country President and Chief Executive Officer of the company in place of Farhat A. Mirza who will be appointed as Chairman of the Board with effect from the same date.
It has been reported that Clariant's quality and environmental management is now globally certified to ISO 9001 and ISO 14001 standards, thus guaranteeing its customers internationally established standards of quality and business processes of environmental protection. The company has been selected for the fourth time running by the Karachi Stock Exchange for Top 25 Companies Awards. The current selection pertains to the year 2004.
Clariant Pakistan Limited is a subsidiary of Swiss multinational company, Clariant International Limited incorporated in Switzerland. The holding company owns 75% of its total 15.597 million shares of Rs 10 each. NIT owns 11.54% and seven public sector companies own 4.19% of its stock. Its 929 individual shareholders hold 8.08% of its equity.
The company is a limited liability company and is incorporated/domiciled in Pakistan. The address of its registered office is 1-A/1, Sector 20 Korangi Industrial Area Karachi where one of its three factories is also located. The URL of its website is www.clariant.com.pk. The other two factories are located at Jamshoro (Sindh) and in Lahore (Punjab).
Clariant is the global leader in the field of specialty chemicals with presence in five continents and 90 countries with more than 100 group companies, employing about 25,000 people and headquartered in Muttenz near Basle, Switzerland.
Clariants businesses are organised in five divisions: Textile, Leather and Paper Chemicals (TLP) Masterbatches, Pigments and Additives, Functional Chemicals and Life Science Chemicals.
During 2005, the year under review, the company generated net sales at Rs 4.799 billion (2004: Rs 3.964 billion) registering 21% growth over the preceding year's which is quite impressive. It may be emphasised that there are three points about sales.
Second, the sales growth has been made possible through the contribution of all the business segments. Favourable growth in Textile, Leather and Paper Division (TLP) has been recorded at 21% and for Masterbatches at 18% in comparison to last year's.
Third, the growth percentage is all the more commendable if seen in the backdrop of uncertainty of petroleum based raw materials. This situation continued to exert pressure on the selling price throughout the year.
The largest contributor to the company sales was textile business segment which accounted for net sales amounting to Rs 3.70 billion comprising 77% of company's sales. After that leather business segment sales amounted to Rs 527.2 million comprising 11% of the company's sales.
The contribution of Masterbatches business segment amounted to Rs 512.4 million comprising 10.7% of sales. Remaining 1.3% sales was due to other products.
The addons to the profitability were gross profit increase, other operating income and indenting commission and decline in the finance cost.
But compared to previous year's the operating income was much lower during the period under review. In addition depreciation charges were around last year's figure.
The directors emphasised that, the company through pricing and other cost containment measures still managed to improve on the exceptional profits of 2004. It may be recalled that 2004 profit had also included a one time gain of sales tax refund of Rs 76 million.
The company posted profit after tax at Rs 432.94 million which improved by exceptional 29% as compared to last year's.
Earnings per share when compared to 2004, went up to Rs 27.76 from Rs 21.53.
The directors recommended a final cash dividend of 35% in addition to the two interim cash dividends of 105% already paid for the period under review. The total cash dividend for the year thus comes to 140% (Rs 14 per 10-rupee share) showing improvement of 10% (Re one per share) over last year's.
In addition to cash dividend the Board recommended bonus share issue of 40% to the shareholders. At the present market price of its share at Rs 222, the bonus stock dividend is highly lucrative.
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Performance Statistics (Million Rupees)
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31st December 2005 2004
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Share Capital-Paid-up: 155.97 155.97
Reserves & Surplus: 893.59 741.40
Shareholders Equity: 1,049.56 897.37
L.T. Debts: 500.00 475.00
Deferred Tax Liabilities: - 4.94
Current Liabilities: 1,877.26 1,564.59
Fixed Assets: 527.59 547.35
L.T. Loans & Advances: 28.26 22.08
L.T. Deposits: 1.94 2.08
Deferred Tax Assets: 8.92 -
Current Assets: 2,860.11 2,370.39
Total Assets: 3,426.82 2,941.90
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Sales, Profit & Pay Out
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Net Sales: 4,798.88 3,964.94
Gross Profit: 1,137.73 896.54
Indenting Commission-Net of Payment: 24.75 26.01
Other Operating Income: 6.01 81.70
Operating Profit: 761.26 644.24
Finance (Cost): (92.18) 98.41
(Depreciation): (84.07) (83.91)
Profit Before Taxation: 669.08 545.83
Profit After Taxation: 432.94 335.72
Earnings Per Share (Rs): 27.76 21.63
Dividend Cash (%): 140.00 130.00
Dividend Bonus Stock (%): 40.00 -
Share Price (Rs) on 06/04/06: 222.00 -
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Financial Ratios
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Price/Earning Ratio: 8.00 -
Book Value Per Share: 67.29 57.53
Price/Book Value Ratio: 3.30 -
Debt/Equity Ratio: 32:68 35:65
Current Ratio: 1.52 1.51
Asset Turn Over Ratio: 1.40 1.34
Days Receivables: 90 105
Days Inventory: 122 115
Gross Profit Margin (%): 23.70 22.62
Net Profit Margin (%): 9.02 8.46
R.O.A. (%): 12.63 11.41
R.O.C.E (%): 27.94 24.37
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