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By SHABBIR H. KAZMI
Updated Aug  14, 2000

At a time when the market is devoid of any positive news release of half yearly results by companies provides some reason, at least, to retail investors to look back towards equities market. They are trying to forecast the results of Engro Chemical and Fauji Fertilizer. While the overall consensus is that, like usual, the two companies will be announcing 10 to 15 per cent interim dividend, some analysts do not agree with the forecast. They say that during the first half of the year 2000 urea offtake was low and profit margin was lean which may not allow the companies to announce such a dividend. While the cashflow of Engro has remained under pressure, Fauji's results will be better due to export of urea. However, they believe that full year results will be better despite increase in gas (fuel) price.

HUBCO

While there seems to be no immediate resolution of ongoing tussle with WAPDA, the Company made a provision of Rs 13.5 billion in accordance with International Accounting Standards for the year ending June 30, 2000. Therefore, a loss of over Rs 6.8 billion has been posted. The results indicate a negative Rs 6.04 basic earning per share as compared to that of a positive of Rs. 5.79 for the previous year. The turnover of the Company improved but there was also an increase in operating cost resulting in a marginal increase in gross profit. The total units generated were 6,404 GWhs which also improved the despatch to WAPDA. However, there was a substantial reduction in other operating income which came down from 1,017 million to just Rs 222 million. There was nearly 60 per cent increase in furnace oil price during the year, which did not affect the margin because it was a pass-on cost. However, the financial expenditure of the Company decreased from Rs 4.1 billion for the previous year to Rs 3.9 billion for the year 2000.

LEVER BROTHERS PAKISTAN

The Company has released half yearly results and also announced 66 per cent interim cash dividend. The sales came down by over 2 per cent to Rs 9.7 billion whereas the cost of goods sold depicted a drop of 1.98 per cent to Rs 7.9 billion. For the year 2000 profit before tax was Rs 501 million as compared to a profit of Rs 379 million which enabled the Company to declare a handsome dividend. The parent company, Unilever has acquired Bestfoods, a US company, in June this year. Bestfoods has a major investment in Rafhan Bestfoods in Pakistan. The merger is a win-win situation for both the companies in Pakistan. At the same time there are news about splitting of Unilever into two companies, at least which may also result in splitting of operations of Lever Brothers Pakistan.

BANK OF PUNJAB

The Bank has released financial results for the first half of year 2000. For the six months period profit before tax was reported at Rs 224 million as opposed to Rs 206.5 million for the corresponding period of the year 1999. However, profit after tax was lower than the previous year - a decline from Rs 124 million for the pervious year to Rs 119 million for the year 2000. The Bank has also registered a decline in deposits and advances but increase in investments. Deposits came down from 16.583 billion to Rs 16.367 billion and advances declined from Rs 6.442 billion to Rs 5.827 billion. Investments went up from Rs 5.452 billion to Rs 6.509 billion.

SUI TWINS

The GoP has approved over Rs 20 billion infrastructure augmentation plan for Sui twins to enable them additional 928 MMCFD gas. There was also a report that SNGPL profit before tax for the year ending June 30, 2000 will be over Rs 1.16 billion. The expectation is based on the fact that the Company has been able to post higher turnover and to reduce its T&D losses. The Company will be posting this kind of profit after a long time. The revenue of SSGC is also expected to be higher than last year due to enhanced supply to FFC-Jordan and KESC. The SSGC was expected to float one billion rupee TFCs this year to undertake its T&D expansion/revamping programme which seems to have been deferred till sale of its LPG business.

PAKISTAN TOBACCO COMPANY

The Board of the Company has decided to raise over Rs 2.2 billion through Right Issue at par in the ratio of 7 additional shares for every one share (700%). The right shares are being issued at par value against a book value of Rs 27.14 at December 31, 1999 and a forecast post rights book of Rs 8.29 at December 31, 2000. The Company in recent years has been incurring losses due to adverse business conditions. The Company plans to follow a three pronged strategy which includes: further investment to support brands, support a focused capital investment programme to enhance productivity and quality and to restructure the Company to meet new challenges. The issue has been fully underwritten by British American Tobacco (Investment) Limited, a subsidiary of British American Tobacco plc.

MOVEMENT AT A GLANCE

SCRIP

HIGH

LOW

TURNOVER (SHARE MN)

CLOSING PRICE

Lever Brothers

1050.00

958.00

16,580

1050.00

Hub Power Co

17.95

16.45

179,253,000

16.80

Reckitt & Colman

28.25

25.00

34,300

25.50

Fauji Fertilizer Co.

42.50

41.55

2,874,800

41.55

Engro Chemical

55.85

52.90

16,273,700

52.90

Sui Northern Gas

15.55

14.60

16,404,000

15.55