against Saudi Arabia by Western media and the
campaign against Pakistan is fully supported by India.
The politicians have been demanding restoration of
democracy in the country. However, it took exceptionally long to elect
the new leader of the house. No sooner did the Prime Minister took the
oath, some factions started their campaign against him. It is not the
question of prevailing of PML(Q) government but survival of democracy in
the country. Politicians are supporting, by their acts, the perception
that democracy cannot prevail in Pakistan.
According to a report by AKD Securities, the company
has demonstrated revenue growth with improved capacity utilization. The
prospects for improved margins for the year 2002 are assured. Beyond
December, pulp prices seem to be headed towards new low as predicted by
declining 3-month forward price of Northern Board Soft Kraft (NBSK).
Packages imports pulp for higher-grade products. With improved capacity
utilization, decline in pulp price and appreciation of Pak rupee, the
nine-months profit has improved as compared to the corresponding period
of last year. Lower raw material cost will help in bringing down working
capital requirement. Coupled with this, lower interest rates will
further improve the bottom line.
GADOON TEXTILE MILLS
According to a report by IP Securities, the economic
fundamentals for the company have changed drastically. International
economic slow down, squeezed selling margins, diminution in the value of
investments and termination of a 10-year tax holiday period have all
together pushed the company's earning base down to a groveling level. In
the wake of a rebound of textile production in the US, Canada and Far
East, the company has the potential to improve its bottom line by
focusing on value-added exports. Yarn export contributed about 40%
towards total sales of the company for the year 2001. For the year 2002,
the company is expected to post Rs 191 million profit after tax, which
will be about 22% lower than the previous year's level. Keeping in view
the company's payout policy, the analysts forecast a 35% dividend for
the year 2002.
The company has posted Rs 3.376 million profit before
tax for the year ending June 30, 2002 as compared to a profit of Rs
15.365 million for the previous year. Though the company managed to
improve sales, the out of proportion increase in cost of goods sold
plunged the profit. Increase in selling and administrative expenses and
financial charges, coupled with decrease in other income were
responsible for reducing the profit to one third level. Sales improved
from Rs 60 million to Rs 68 million. As against this, cost of sales went
up from Rs 43.5 million to Rs 59.2 million. Administrative and selling
expenses hiked from Rs 3.4 million to over Rs 5 million. Other income
came down from Rs 3 million to slightly more than Rs 1.2 million.
Financial expenses more than doubles, from Rs 0.644 million to Rs 1.375
A better control on cost of goods sold and lower
financial charges have helped the company in posting profit for the year
ending June 30, 2002. The company has posted about Rs 32 million profit
after tax for the year 2002 as compared to a loss after tax amounting to
Rs 89 million for the previous year. Sales improved from Rs 725.4
million to Rs 732.9 million. Cost of goods sold came down from Rs 749
million to Rs 684 million. The most remarkable feature was the reduction
in financial charges, from Rs 52.5 million to Rs 0.692 million. The
results would have been still better had there was not nearly 50%
decline in other income, a plunge from Rs 9 million to Rs 6.7 million.
However, huge accumulated losses remains the biggest concern.
Accumulated losses as at June 30, 2002 amounted to Rs 469 million. The
company will take years to wipe out these losses.
HILAL FLOUR & GENERAL MILLS
The company has not only posted profit but also
declared 22.5% dividend for the year ending August 31, 2002. Sales went
up from Rs 115 million to Rs 266 million. Cost of sales hiked from Rs
117 million to Rs 257 million. Administrative and selling expenses went
up from Rs 1.96 million to Rs 2.45 million. The company has a very low
paid-up capital of Rs 2.3 million. It is very difficult to find any
rationale for the listing of such companies on Karachi Stock Exchange.
These companies may be of some benefit for the sponsors, but are of no
consequence for the investors.