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A weekly review of fundamentals enjoyed by the blue chips

By SHABBIR H. KAZMI
Updated Nov 20, 2000

The market continues to witness erosion in market capitalization due to lack of interest of both retail and institutional investors. The situation is not expected to improve till Pakistan concludes a long-term funding agreement with the IMF. The stand-by arrangement, an expensive one, could help in resolving an immediate problem only.

THE GENERAL TYRE & RUBBER CO.

Shareholders of the Company would be pleased to receive 60 per cent dividend for the year ending June 30, 2000. They have already received 20 per cent interim dividend and the Board of Directors have recommended 40 per cent final dividend. While there was increase in sales, the Company was able to curtail manufacturing cost of goods sold. The efforts improved gross profit from Rs 390 million for the year 1999 to Rs 505 million for the year. Another factor contributing to increase in profit before tax was reduction in financial and other charges. However, the tax provision increased from Rs 77 million for the previous year to Rs 126 million for the year 2000.

POLYRON

The Company has posted loss before tax of Rs 87 million for the year ending June 30, 2000 as opposed to profit of Rs 16 million for the previous year. While there was lower sales as compared to the previous year, cost of goods sold went out of proportion for the year 2000. The result was gross profit, as a percentage of sales came down from 17 per cent in the year 1999 to 2.3 per cent for the year under review. Another reason for huge losses is substantial increase in financial charges, from Rs 51.7 million for the year 1999 to Rs 86.6 million for the year 2000. However, the management was able to curtail operating expenses.

TRANSPAK CORPORATION

The Company has declared 30 per cent dividend for the year ending June 30, 2000 despite reduction in sales. Sales came down from Rs 278 million for the year to Rs 176 million for the year under review. Gross profit for the year, as a percentage of sales, improved from 28 per cent for the year 1999 to 34 per cent for the year 2000. Profit for the year 2000 was Rs 1.8 million as opposed to a profit of Rs 13 million posted for the previous year. There was reduction in operating expenses which came down from Rs 52 million for the year 1999 to Rs 44.65 million for the year under review. Financial charges were also lower as compared to the previous year. The dividend amounting to Rs 9 million will be paid by transferring Rs 7.5 million from general reserve.

ALLWIN ENGINEERING INDUSTRIES

While the Company was not able to declare any dividend for the year ending June 30, 2000, it was encouraging to note that profit before tax improved from Rs 44,000 to approximately Rs 8 million. Similarly, there was increase in sales but the advantage was eroded by the increase in cost of goods sold, administrative, selling and distribution expenses. However the Company was able to curtail financial charges from Rs 37.6 million for the year 1999 to Rs 23.5 million for the year under review. The Company may not be able to pay any dividend for a number of years due to accumulated losses of Rs 55 million carried forward. The other factor which would continue to adversely impact profitability of the Company is performance of car assemblers in the country.

FIRST IMROOZ MODARABA

As a result of improvement in operations the Modaraba would be able to pay higher dividend for the year ending June 30, 2000. The Board of Directors of Management Company has approved payment of 30 per cent dividend to certificate holders. While gross profit improved the benefit was eroded by the increase in operating expenses. The other factors contributing to improvement in profit before tax was increase in other income and other charges being at nil. Tax liability also increased from Rs 17 million for the year 1999 to Rs 19 million for the year under review.

BERGER PAINTS

Overall improvement in operations of the Company enabled it to double its dividend payment to shareholders for the year ending June 30, 2000 as compared to the previous year and to also transfer Rs 20 million to general reserve. Higher sales resulted in higher gross profit, from Rs 47 million for the year 1999 to Rs 73 million for the year under review. The Board of Directors have proposed 50 per cent dividend for the year 2000, whereas the payout for the previous year was 25 per cent.

PIONEER CABLES

Despite carrying a huge burden of accumulated loss of over Rs 31 million, the Board of Directors have recommended 45 per cent dividend for the year ending June 30, 2000. It is worth noting that despite posting a loss after tax of Rs 1.3 million the Company paid 50 per cent dividend by transferring over Rs 1.7 million from general reserve. However, for the year 2000 the situation was much better because profit after tax came to Rs 1.6 million and proposed dividend amounted more or less the same amount.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

TURNOVER
 (SHARE MN)

CLOSING 
PRICE

PTCL

23.75

22.10

163121000

22.30

PSO

153.60

140

144257000

149.05

Hubco

18.50

16.95

221636500

17.60

MCB

32.95

28.95

14741000

29.40

Biafo

4.65

3.95

618000

4.15

Alwin Eng.

7.00

7.00

 

7.00

Trans Pak Corp

18

 

18.00

18

Polyron

3.20

2.55

27500

2.55