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By SHABBIR H. KAZMI
Updated May 05, 2001

Though the market has remained range-bound and investors preferred to stay on sidelines, greater activity is expected in the fertilizer sector in the following weeks mainly due to announcement of results by Fauji and FFC-Jordan. Eyes are also focused on HUBCO Board meeting. An important observation was enhanced trading volume for Nishat Group companies. Trading in MCB is expected to remain high due to a forecast for higher profit. While some other listed banks were not able to declare dividend for the year ending December, 31, 2000 due to need for enhancing paid-up capital, MCB does not face this situation. PTCL's nine months results have failed in creating buying euphoria. Its privatization at an attractive price is a big question.

PAKISTAN TELECOMMUNICATION COMPANY

The nine months results released by PTCL came as a pleasant surprise to many. The scrip has remained under-performer during the last six months registering a decline of 18 per cent in its price level during the same period. There has been no significant price surge even after the invitation of EoI for its 26 per cent dis-investment. However, with the announcement of its results market sentiments should be a bit positive. Now the eyes are focused on full year results to be made public somewhere in October. PTCL has posted Rs 12.3 billion profit after tax on sales of over Rs 45 billion translating in an EPS of Rs 2.41.

BILAL FIBRES

The Company has released half yearly results for the period ending March 30, 2001 and also announced 5 per cent interim dividend. However, the directors, sponsors and associate undertakings have relinquished their right for the interim dividend. Sales for the half year amounted to Rs 215 million and accumulated loss as at March 30, were Rs 251.7 million. The Company has posted Rs 16.5 million profit after tax for the first half of the year 2001 as compared to a profit of Rs 6.5 million for the corresponding period of the previous year.

PAKISTAN GUM & CHEMICALS

The Company has posted Rs 23.8 million profit after tax for the year ending December 31, 2000 as compared to a profit of Rs 28 million for the previous year. However, it was able to improve dividend payout from 12.5 per cent for the year 1999 to 33 per cent for the year under review. A profit of Rs 28 million for the previous year was not enough to take care of Rs 79.4 million accumulated losses and nearly Rs 55 million have to be transferred from general reserves to balance the equation as well as payment of dividend. An important point is that administrative and selling expenses increased from Rs 10 million to Rs 19 million during this year. However, the adverse impact was minimized due to 'other income' amounting to Rs 6.9 million for the year 2000.

SANA INDUSTRIES

The Company has posted Rs 16 million profit after tax for the six months period ending March 31, 2001 as against a profit of Rs 11 million for the previous year. On the basis of these accounts the Board of Directors have recommended 35 per cent interim dividend. However, one needs to find the reasons for this improvement because sales during this period were slightly lower than the sales for the corresponding period of previous year. A better cost control enabled the Company to improve its gross margin, curtail selling and distribution expenses and financial charges. Financial charges came down from nearly Rs 3 million for the year 2000 to Rs 0.162 million for the period under review.

HUSEIN SUGAR MILLS

Despite a reduction in operating profit, the Company was able to improve its dividend payout for the year ending September 30, 2000. The Board of Directors have recommended 10 per cent dividend for the year 2000. Payout for the previous year was 7.5 per cent. While profit for the year under review is Rs 16 million, it was Rs 15 million for the year 1999. However, due to Rs 28.3 million accumulated losses, the Company has to transfer Rs 31.7 million from general reserve to be able to pay 7.5 per cent dividend.

BATA PAKISTAN

According to a report by KASB, Bata Pakistan has achieved an earnings growth of 37 per cent for the year ending December 31, 2000 with most financial health indicators confirming a major turnaround in the Company's performance. Bata's sales performance over the last six years has played a lagged 'follow-the-leader' game with GDP growth. Bata competes at the lower end of the market catering to the demand of the masses and directly competes with the unorganized sector. The imposition of 15 per cent sales tax at all levels in the economy has helped to eliminate this disadvantage to the organized sector. Bata has historically paid dividend in a consistent manner, albeit at low payout ratios. Bata's ROE ratio was 11.3 per cent for the year 1999 which improved to 14.3 per cent for the year 2000. Bata's leverage ratio has been on an upward trend, driving up its ROE. Rising leverage is reflective of the Company's decision to rely on external financing for its capex and working capital financing requirements.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

PTCL

18.25

17.80

18.05

57,338,500

Hubco

21.65

21.15

21.45

49,925,000

ICI

9.45

9.10

9.20

21,755,500

MCB

28.50

26.70

28.40

16,653,000

Nishat Mills

18.75

17.40

18.25

6,254,500

Fauji Fertilizer

42.75

41.70

42.50

6,054,200

Adamjee Ins.

66.25

64.15

64.45

3,761,500