Under the pressware category, TGL produces ashtray, tea and cake sets, jugs and mugs and plates and bowls among other things. Float glass, on the other hand, refers to particularly smooth and unadulterated glass used in windows. In this category, the company produces various types such as clear glass used in display cases, shelves and partitions; mirror, used in interior decoration and furniture; sandblasted and reflective/tinted float glass. Some of the company's widely known brand names are Toyo Nasic, omroc and NOVA glassware.

Shareholding pattern

As at June, 2019, nearly 50 percent of TGL's shares are owned by the directors, CEO, their spouses and children, of which about 45 percent is owned by the CEO, Mr. Omer Baig. The local general public owns around 13 percent while 11 percent is held in modarabas and mutual funds; banks, DFIs and NBFIs hold around 7 percent. The rest are distributed between the remaining categories as depicted in the table.

Historical and operational performance

Although Tariq Glass Limited's top-line is following an upward through the years, its margins have been fluctuating. The year FY15 saw some recovery after losses incurred in the preceding year with a negative net margin of 0.2 percent in FY14. The division of the top-line for FY15 reveals that float glass sales increased by 26 percent year on year while tableware sales experienced a decline of 20 percent due to the closure of furnace with a capacity of 110 metric tons per day for maintenance purposes.

The economy at large was adversely affected by events such as the general elections during FY18 which led to a great uncertainty and high rates of inflation as well as the devaluation of the rupee. Gross and operating margins saw a decline during the year. The company regained its growth trajectory in FY19 and was able to increase top-line to its highest ever, recorded at approximately Rs14 billion, increasing by 18 percent year on year. Of this the greatest share was taken by the sales of float glass in the local market- Rs7 billion of the total local sales of Rs13 billion. TGL also offered considerable trade discounts in FY19 to counter competition, increasing discounts from Rs7 million to Rs1 billion.

Quarterly performance and future outlook

Top-line for the quarter continued to grow increasing by 9 percent year on year despite the unfavourable business environment caused my macro level economy correction. The resultant inflation in the economy contributed to rising costs of production. Due to demand being adversely affected along with falling purchasing power of the people, TGL was unable to pass the effect of increased prices to the customer, resulting in falling profitability for the period.

The escalating tensions in the political domain along with a slowdown in the economy may create a negative impact in the top-line of the company.

According to the company's quarterly report, TGL hopes that the current government will be able to handle the political unrest which might bring some stability in the economy and hence the business.

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TGL: Quarterly results
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Rs (mn)                               1QFY20      1QFY19         YoY
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Sales                                  3,577       3,280       9.05%
Cost of sales                        (3,003)     (2,696)      11.39%
Gross profit                             574         584      -1.71%
Administrative expenses                 (62)        (51)      21.57%
Selling and distribution expenses       (63)        (61)       3.28%
Other operating income                    17          24     -29.17%
Other operating expenses                (23)        (30)     -23.33%
Operating profit                         443         466      -4.94%
Finance cost                           (137)        (36)     280.56%
Profit before taxation                   306         430     -28.84%
Taxation                                (76)        (96)     -20.83%
Profit after taxation                    230         334     -31.14%
EPS                                     3.13        4.53     -30.91%
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TGL: Pattern of shareholding as at June 30, 2019
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Categories of shareholders                                    %
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Directors, CEO, their spouses and minor children          48.47
Associated companies, undertaking and related parti        11.8
NIT & ICP                                                0.0252
Banks, DFIs and NBFIs                                    7.0174
Insurance companies                                      1.5704
Modarabas and mutual funds                              11.2949
General public:
Local                                                   13.1868
Foreign                                                  1.0641
Others:
Joint stock companies                                    3.1699
Investment companies and cooperative societies           0.0225
Pension funds and provident funds                        2.3897
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Total                                                       100
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Source: Company accounts

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