The chairman of the company Rafiq M. Habib spoke about the strategic objectives, entrepreneurial effort and diversity in the portfolio of his company and of synergising of amalgamated entities. Now Thal Limited after 40 years of its existence shows that it is a Rs 5 billion enterprise in terms of sale having dedicated workforce of 4000 plus people.
Its engineering segment is more remunerative segment. Sale of sets, parts, and services of auto air-conditioners grew by 44%. On the other hand sale of wiring harnesses grew by over 37%. This division supplies this product to all big names in Japanese car and truck manufacturing in Pakistan and other auto assemblers.
As regards the other segment Building Material and Allied Products segment, sales turnover of jute products increased by 6% to Rs 1.004 billion (FY05: Rs 0.949 billion) and exports increased to US $5.2 million in FY06 from US $4.1 million in the previous year. In paper-sack operations, PPCL achieved 28% and KPPL improved by 30% in sales volume. Laminates sales increased by 12% to Rs 628 million in FY06 as compared to preceding year's. Laminates export sales were slightly less due to the inroads of Chinese products in Kuwait.
Thal Jute Mills Ltd (TJML) was incorporated in 1966 as one of the first jute mills set up in the then West Pakistan at Muzaffargarh. The other milestone was reached in 1974 when Pakistan Papersack Corporation Ltd (PPCL) started commercial production.
A second jute factory was set up in Karachi in 1976 through incorporation of Pakistan Jute and Synthetics Ltd (PJSL). In 1981 the first high pressure decorative laminate plant in Pakistan was set up in Hub Chowki Balochistan - Balochistan Laminates Division (BLD) as a division of PPCL. It makes decorative laminates under the brand name - Formite.
The year 1989 saw establishment of its company Khyber Papers (Pvt) Limited (KPPL) in Gadoon (NWFP) to produce papersacks to cater to the cement manufacturers of northern region. In 1994 PJSL was merged into TJML and became the largest jute goods manufacturer of Pakistan.
In 1996 Thal Engineering was created as a Division of TJML, with the signing of technical assistance agreement (TAA) with Denso Corporation, Japan, for progressive manufacture of car air-conditioners. TJML then diversified from an agri based jute goods manufacturing to a more technically oriented engineering business.
By 2000 Thal Engineering signed TAA with Furukawa Electric Company, Japan, for manufacture of wiring harnesses, which it supplies to all major OEMs (Original Equipment Manufacturers) in Pakistan.
In 2004 TJML changed its name to Thal Limited (TL) as it is much more than a jute manufacturing operation. In 2006, PPCL and KPPL merged into Thal Limited which shaped the company as one of the largest employers in the country with the work force exceeding 4000 people.
The annual report 2006, of Thal Limited hails it as a market leader in the local market of jute goods, laminate products, paper sacks, autowiring harnesses and auto airconditioners. The company is listed on Karachi and Lahore stock exchanges and its 5-rupee share is recently quoted at Rs 178 per share showing immense confidence of investors in the enterprise. During the last one year, market value of share remained quite high as it ranged between Rs 150 and Rs 225 per share.
The company maintains excellent track record of profit distribution both in terms of regular announcements and at highly attractive dividend rates. For the year under review the company announced cash dividend at 100% (FY05: 130%) and Bonus Stock at 20% (FY05: PPCL: 20%).
During FY06, the period under review, the company posted net turnover at Rs 5.907 billion (FY05, 4.655 billion) gross profit at Rs 1.154 billion (FY05: Rs 0.856 billion) registering 26.9% and 34.8% increase respectively over corresponding figures of the preceding year. The company booked net profit after taxation at Rs 663.17 million (FY05: Rs 492.21 million, showing 34.7% increase over preceding year's figure.
The business of the company has been segmented into two areas, engineering and building material and allied products. Engineering segment accounted for 59% of the company's sales while the other segment generated 41% of the company's sales. The engineering segment was by far more remunerative as engineering segment's result works out to 77.2% to combined segments results of Rs 1,123.52 million.
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Performance Statistics (Million Rupees)
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30 June 2006 2005
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Share Capital Paid-up: 69.57 140.06
Share to be issued: 28.03 -
Reserves: 2,334.23 1,704.14
Shareholders Equity: 2,431.83 1,844.20
L.T. Debts: 14.34 9.61
Deferred Taxation: 10.43 9.30
Current Liabilities: 756.88 558.45
Tangible Fixed Assets: 272.30 233.81
Investment Property: 1.09 1.10
L.T. Investments: 242.80 74.98
L.T. Loans & Deposits: 4.77 4.67
L.T. Prepayments: 14.40 -
Current Assets: 2,678.12 2,107.00
Total Assets: 3,213.48 2,421.56
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Sales, Profit & Pay Out:
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Turnover-Net: 5,907.11 4,655.53
Gross Profit: 1,154.41 856.31
Other Operating Income: 96.83 87.38
Profit on Trading Activities: 18.74 16.47
Operating Profit: 1,051.31 773.28
Finance (Costs): (13.92) (18.77)
(Depreciation): (55.55) (46.55)
Profit Before Taxation: 963.54 703.94
Profit After Taxation: 663.17 492.21
Earnings Per Rs 5/- Share (Rs): 33.98 25.22
Dividend Cash (%): 100.00 130.00
Dividend Bonus Stock: 20% 20%
Share Price (Rs) on 01/03/2007: 178 -
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Financial Ratios:
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Price/Earning Ratio: 5.23 -
Book Value Per Share: 174.79 132.55
Price/Book Value Ratio: 1.01 -
Debt/Equity Ratio: 1:99 1:99
Current Ratio: 3.53 3.77
Assets Turn Over Ratio: 1.84 1.92
Days Receivables: 38 48
Days Inventory: 124 112
Gross Profit Margin (%): 19.54 18.39
Net Profit Margin (%): 11.23 10.57
R.O.A. (%): 20.63 20.33
R.O.C.E. (%): 26.99 26.41
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Capacity & Actual Production:
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A) Paper Sack (000' Bags)
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Annual Installed Capacity: 140.00 140.00
Actual Production: 85.25 67.02
Capacity Utilization (%): 60.89 47.87
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B) Jute (000' Metric Tons)
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Annual Installed Capacity: 27.50 27.50
Actual Production: 22.33 22.33
Capacity Utilization (%): 81.20 81.20
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C) Auto Air-conditioners (000' Units)
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Annual Installed Capacity: 60.00 60.00
Actual Production: 68.32 54.21
Capacity Utilization (%): 113.87 90.35
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D) Wire Harness (000' Units)
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Actual Production: 62.50 45.62
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