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By SHABBIR H. KAZMI
Updated Apr 07, 2001

The number of trading days were reduced due to holidays and whatever trading was done was more like a ritual. However, two factors disbursement of tranche by the IMF and announcement of rules by the SECP prohibiting insiders trading may determine the trading complexion next week. The recent interest in fertilizer companies may not continue after imposition of GST on urea Rs 220 per tonne.

ABBOTT LABORATORIES

The Company has posted Rs 284 million profit before tax for the year ending November 30, 2000 and announced 30 per cent final dividend. The Company has already paid 10 per cent interim dividend and total dividend payout comes to 40 per cent for the year 2000. Out of profit after tax of Rs 179.5 million for the year 2000, dividend paid to shareholders amounted to Rs 77 million and a sum of Rs 103 million was transferred to general reserves. The reasons for improved profitability seems to: higher sales, better cost controls and lower financial and other charges. Gross profit increased from Rs 638 million for the year 1999 to Rs 817.5 million for the year under review.

CHAKWAL SPINNING MILLS

The Company has posted Rs 52.9 million profit after tax for the year ending September 30, 2000 as compared to a loss after tax amounting to Rs 10.3 million for the previous year. By virtue of this, accumulated losses came to Rs 248.6 million as on September 30, 2000 as against a paid-up capital of Rs 79.2 million. Realizing the situation, the management of the Company also decided to raise paid-up capital by issuing right shares amounting to Rs 34.056 million. This will enhance paid-up capital to Rs 113.256 million. Still the net worth of the Company will remain negative. The Board of Directors recommended 7.5 per cent dividend payment to shareholders. The Company seems to continue to suffer from debt burden as financial charges for the year amounted to Rs 30.3 million. The reason for this statement is that administrative and selling expenses amounted to Rs 10.455 million only.

YOUSAF WEAVING MILLS

The business was not like usual for the Company during the year ending September 30, 2000. Operating profit for the year 2000 was Rs 101.97 million as compared to that of Rs 105.78 million for the previous year. While most of the spinners were able to reap the benefit of lower prices of cotton, it is difficult to believe that prices of yarn remained high for a weaving company. While financial charges for the year under review came down to Rs 54.7 million, they still eat up bulk of profit. The company has not announced any dividend for its shareholders, but decided to issue 20 per cent right shares. Less efforts are made to curtail financial charges, profitability of the Company may remain under pressure. With an increase of paid-up capital by 20 per cent, it will be interesting to watch dividend paying ability of the Company.

PARAMOUNT SPINNING MILLS

The Company has posted Rs 135 million profit before tax for the year ending September 30, 2000 as compared to a profit of Rs 18 million for the previous year. However, as a result of provision against diminution value of investment in equities amounting to nearly Rs 130 million this profit was reduced to slightly more than Rs 5 million. One may believe that this was an extra ordinary item, but the SECP and Companies Affairs Department of KSE should look into the affairs of the Company. Shareholders have a right to know why the management decided to invest in equities and what was the basis of selection of equities. If there was surplus cash it should have been used to discharge debt rather than investing in equities. Financial charges for the year 2000 amounted to Rs 63.6 million. However, to cover-up this provision, the Board of Directors have recommended 40 per cent dividend amounting to Rs 42 million out of retained earnings.

SHAMS TEXTILE MILLS

The Company has posted Rs 92 million profit after tax for the year ending September 30, 2000 and managed to set aside accumulated losses amounting to Rs 80 million and also distribute 10 per cent dividend among the shareholders. While sales of the Company for the year 2000 were marginally higher than those for the previous year, a stringent control on cost of goods sold yielded the result. Operating profit jumped from Rs 87 million for the year 1999 to Rs 205.8 million for the year under review. Financial charges also came down but other charges went up from Rs 1.8 million for the previous year to Rs 24.7 million for the year 2000.

N. P. SPINNING MILLS

The Company posted Rs 57 million profit after tax for the year ending September 30, 2000. However, accumulated losses amounting to Rs 35.8 million eroded the benefit and shareholders would get only 10 per cent dividend. The Company also seems to suffer from higher debt burden. Financial charges were Rs 54.75 million and Rs 43.20 million for 1999 and 2000 respectively. Shareholders have a right to know if higher financial charges were the outcome of indiscriminate lending to associate companies.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

PTCL

18.40

17.20

17.45

103,176,500

Hubco

21.00

20.30

20.65

61,561,500

ICI

8.75

8.60

8.65

3,672,500

Yousuf Weaving

5.00

4.00

4.75

10,000