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By SHABBIR H. KAZMI
Updated Mar 05, 2001

The real concern is that the IMF is not willing to lower revenue collection target which may cause delay in disbursement of funds under the stand-by arrangement. Some analysts say that the IMF should accept the reality and give higher weight to revival of the economy revival of economy paves the way for higher revenue collection. The Fund must appreciate that this time the GoP has not resorted to enhance collection of development surcharge on POL products. It seems that POL prices will be lowered after the review.

The week witnessed a lot of speculative activity in HUBCO. However, unless the Court withdraws the restriction on payment of dividend and lenders also ratify the Agreement with WAPDA, stockholders should not expect any announcement regarding dividend.

FAZAL TEXTILE MILLS

The Company has decided to pay a record dividend of 185 per cent for the year ending September 30, 2000. This was possible due to a phenomenal growth in profit after tax from Rs 47 million for the year 1999 to Rs 283 million for the year under review. While there was increase in sales, the stringent control on cost of goods sold paid the dividend. Gross profit margin improved from Rs 166 million for the previous year to Rs 509 million for the year 2000. The Company also transferred Rs 170 million to general reserve.

ZAMAN TEXTILE MILLS

The Company has posted profit before tax of Rs 60 million for the year ending September 30, 2000 as compared to a profit of Rs 10 million for the previous year. It is yet to be examined whether it was the stringent control on cost of goods sold or the benefit of low prices of raw materials. Cost of goods sold came down from Rs 403 million for the previous year to Rs 323 million for the year 2000. However, the profit amount was reduced by over Rs 25 million payment against gas charges. In the absence of explanatory notes, one can only assume that it was an extraordinary item but seems to be without any rationale. However, the Company has improved its dividend payout from 10 per cent for the previous year to 30 per cent for the year under review.

KOHINOOR TEXTILE MILLS

The Company has posted profit before tax of Rs 109 million for the year ending September 30, 2000 as compared to that of about Rs 40 million for the previous year. The profit would have been higher had the Company not made a provision of Rs 49 million for diminution in value of investment. The Company had made a provision of Rs 76 million for the year 1999. The higher profit was possible due to higher gross profit margin. A remarkable feature was financial and other charges amounting to Rs 190 million. The Company seems to fall in the category of those textile mills which suffer from huge financial charges. The reason seems to be huge investment in non-textile areas. The confirmation seems to be made by provision for diminution in value of investment. Does it not seem funny that a company which posts a turnover of Rs 2,252 million pays only Rs 27 million among its shareholders?

DIN TEXTILE MILLS

As a result of higher gross profit margin, the Company has announced 80 per cent dividend for the year ending September 30, 2000. It had paid 30 per cent dividend for the previous year. The Company seems to have benefited from low cost of raw material as its cost of goods sold decreased from Rs 1,054 million for the year 1999 to Rs 847 million for the year under review. The sales remained more or less at the level of previous year. Yet another factor which helped in improving profit was reduction in financial charges from Rs 85 million to Rs 58 million during this period.

D. M. TEXTILE MILLS

The Company has posted Rs 33 million operating profit for the year ending September 30, 2000 as against a profit of Rs 12 million for the previous year. This was possible due to increase in sales and improvement in gross margin. However, Rs 25 million was eaten up by financial charges alone and the Company managed to post Rs 7.8 million profit before tax as compared to a loss before tax of Rs 10.6 million for the previous year. Accumulated loss as at September 30, 2000 stood at Rs 187 million.

SAIF TEXTILE MILLS

The Company improved its dividend payout from 20 per cent for the year 1999 to 25 per cent for the year ending September 30, 2000. The company has posted Rs 91 million profit before tax and the amount would have been higher had it not made provision for doubtful deposit for shares amounting to Rs 10 million.

KOHINOOR WEAVING MILLS

The Company has announced 72.5 per cent dividend and issue of 50 per cent bonus shares on the basis of financial results for the year ending September 30, 2000. It had also paid Rs 11.2 per share dividend last year. However, the Company also seems to be suffering from huge financial and other charges amounting to about Rs 95 million for the year under review. While there was increase in sales there was also an increase in administrative, selling and general expenses. At the same time other income also more than doubled for the year 2000.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

PTCL

20.10

19.25

19.55

198,485,500

HUBCO

22.55

20.85

22.40

288,816,500

ICI

9.80

9.15

9.75

48,931,000

MCB

28.85

27.60

28.30

12,643,500

Askari Bank

14.75

14.50

14.65

628,500

Kohinoor Weaving

42.50

41.00

42.50

63,000

Source: Invest Capital & Securities