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A weekly review of fundamentals enjoyed by the blue chips

By SHABBIR H. KAZMI
Updated Nov 13, 2000

In the absence of news regarding Pakistan-IMF deal and HUBCO, porofitaking opportunities influenced the KSE-100 index. PTCL and PSO registered decline ahead of board meeting. PSO is expected to witness further erosion in price due to a forecast for decline in profit.

The draft of fertilizer policy was discussed at a meeting headed by Razzak Dawood. Urea manufacturers await the policy. A positive announcement regarding future feedstock price is expected to attract fresh investment in the sector.

CHERAT CEMENT COMPANY

The Company has announced results for the year ending June 30, 2000 and outperformed the expectation of equities analysts by posting Rs 287 million profit before tax. Sales were recorded at Rs 1,425 million 25 per cent higher than previous year mainly due to higher ex-factory price. Contrary to this there was only 7 per cent increase in cost of goods sold enabling the Company to post Rs 393 million gross profit. The Company was able to reduce financial charges from Rs 82 million for the year 1999 to Rs 45 million for the period under review. Higher profit after tax enabled the Company to declare 25 per cent dividend for the year 2000 whereas the payout for the previous year was 20 per cent and transfer Rs 25 million to general reserves.

JAVEDAN CEMENT

The Company was able to post gross profit of Rs 1.745 million for the year ending June 30, 2000 as against a gross loss of Rs 22 million for the previous year. This enabled the Company to post an operating loss of Rs 9 million for the year 2000 as against a loss of Rs 47 million for the previous year. Higher financial charges, around Rs 67 million per annum, is a huge burden and may not allow the Company to post profit for a long time. On top of this accumulated loss, amounting to Rs 405 million, carried forward leaves hardly any prospects of paying any dividend to its shareholders.

CHERAT PAPERSACKS

The Board of Directors have recommended 100 per cent final dividend for the year ending June 30, 2000 in addition to 45 per cent interim dividend already paid aggregating to 145 per cent. While there was increase in sales the hike in cost of goods sold lowered gross profit. Operating expenses and financial charges for the year 2000 were more or less at the level of previous year.

GATRON INDUSTRIES

The Company has declared 15 per cent dividend for the year ending June 30, 2000 as against a payout of 12 per cent for the previous year. Higher payment of dividend was possible due to increase in sales growing from Rs 2,713 million for the year 1999 to Rs 3,735 million for the year under review. The Board of Directors have proposed to hold annual general meeting immediately after Eid holidays subject to approval from the Securities and Exchange Commission of Pakistan.

RAFHAN MAIZE PRODUCTS

The Board of Directors have recommended 90 per cent final dividend for the year ending September 30, 2000 in addition to 45 per cent interim dividend already paid aggregating to 135 per cent. While there was increase in sales, the Company was able to post higher gross profit due to tight control on cost of goods sold. Profit before tax for the year 2000 was Rs 493 million as against a profit of Rs 411 million for the previous year. There was increase in selling and marketing, general and administrative expenses and financial and other charges.

DADEX ETERNIT

The Company has declared 40 per cent dividend for the year ending June 30, 2000. Profit after tax for the year 2000 was higher (Rs 66 million) as compared to the profit (Rs 59.78 million) for the previous year. The management chose to transfer higher amounts to revenue reserve and capital reserve for fixed assets replacement. Total appropriations for the year 2000, other than dividend, were Rs 24 million as compared to Rs 15 million for the previous year.

SECURITY PAPERS

The Company has announced 47 per cent final dividend for the year ending June 30, 2000. It has already paid 20 per cent interim dividend aggregating 67 per cent. The Board has also decided to issue 25 per cent bonus shares out of the earnings for the year 2000. While there was an operating profit of Rs 250 million for the year 2000, profit before tax came to Rs 332 million mainly due to higher other income, reversal of provision for diminution in NIT units and price revision effect. The total appropriations for the year 2000 were Rs 118 million as against an allocation of Rs 66 million for the previous year.

ELLAHI ELECTRIC COMPANY

Despite a significant reduction in profit after tax, the Company maintained its dividend payout at 15 per cent of the previous year. While there was reduction in net sales, cost of sales went up. There was reduction in other income and financial charges for the year 2000 as compared to the previous year. Profitability of the Company is expected to remain under pressure due to persistent hike in fuel prices.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

TURNOVER
 (SHARE MN)

CLOSING 
PRICE

PTCL

25.10

23.60

79,949,500

23.60

Hubco

18.35

17.70

94,510,000

17.70

KESC

8.05

7.40

6,773,000

7.40

Elahi Electric

7.90

7.70

39,500

7.70

Cherat Cement

18.15

17.00

275,000 17.85

Javedan Cement

3.75

 3.75

0.00

Cherat Paper

76.50

71.60

144,000

72.00

Gatron Industries

20.05

18.50

33,000

18.50

Rafhan Maize

250.00

230.00

500

230.00

Security Paper

44.50

42.75

84.500

43.60

Dadex Enternit

29.00

27.75

8,400

27.75