STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Jan 25, 2003

 

The KSE-100 index lost about 350 points during the week at the back of crisis in Badla market. The broker fraternity has all the complaints against the SECP. However, the crisis proved that the risk management prevailing at the Karachi Stock Exchange proved futile and fruit less. The action by the SECP, coming too late, helped some of the brokers to avoid default. The investors are right in demanding that a lot more has to be done to burst the ring of market manipulators. 

 

 

 

KARACHI ELECTRIC SUPPLY CORPORATION

The recent conversion of debt into equity seems to have a positive impact on the ailing utility. The KESC has posted Rs 3,475 million loss before tax for July-September 2002 quarter as compared to a loss of Rs 4,383 million for the corresponding period of year 2001. This reduction in loss can only be attributed reduction in financial charges, coming down from Rs 2,113 million to Rs 467 million. Revenue went up from Rs 8,010 million to Rs 8,268 million. However, the out of proportion increase in expenditure led to even higher gross loss, going up from Rs 1,83 million to Rs 2,615 million. The point to be noted is that the increase in expenditure was mainly due to rise in amount pertaining to electricity purchased, going up from Rs 3,218 million to Rs 4,407 million.

PACKAGES

The company has been able to improve its dividend payout due to improved sales, better cost controls and reduction in financial charges for the year ending December 31, 2002 as compared to previous year. Net sales, both local and export, improved from Rs 4,440.5 million to Rs 4,621.7 million. Gross profit went up from Rs 891.4 million to Rs 949.6 million. Though, operating expenses went up but the increase was offset by higher other income. Financial and other charges came down from Rs 365.8 million to Rs 240.7 million. Profit after tax improved from Rs 424.9 million to Rs 655.4 million. The Board of Directors approved payment of 70% dividend for the year 2002 as compared to a payout of 45% for the previous year.

UMER FABRICS

The company seems to be effected by 9/11 incident that has resulted in synchronized global recession. However, the Board of Directors preferred to maintain dividend payout at 15% for the year ending September 30, 2002. Sales declined from Rs 1,778 million to Rs 1,345 million. This was possible mainly due to stringent cost controls. Operating expenses came down from Rs 81 million to Rs 65 million. Financial charges recorded about 49% decline, coming down from Rs 167 million to Rs 86 million. Despite that the company managed to post Rs 69 million profit after tax for the year 2002 as compared to a profit of Rs 83 million for the previous year. The EPS also declined from Rs 3.46 for the year 2001 to Rs 2.87 for the year under review.

 

 

SHAHTAJ TEXTILE

Higher sales enabled the company to improve its payout for the year ending September 30, 2002. The Board of Directors approved payment of 32.5% dividend for the year 2002 as against a payout of 15% for the previous year. Sales went up from Rs 634 million to Rs 773 million. Cost of goods sold also grew from Rs 554 million to Rs 678.7 million. Gross profit improved from Rs 80 million to Rs 94 million. Higher turnover was not possible without increase in operating expenses going up from Rs 16.6 million to Rs 19.5 million. Financial charges remained more or less at the level of previous year at Rs 26 million. Profit before tax improved from Rs 40.6 million to Rs 52.7 million.

KOHINOOR TEXTILE MILLS

The company seems to be the representative of the textile sector that earns substantial profit but bulk of it goes toward financial charges and sponsors also prefer to retain the profit rather than paying to shareholders. The company posted Rs 498 million gross profit. Out of this Rs 263.7 million went toward operating expenses and Rs 288 million toward financial and other charges. This resulted in Rs 48 million profit before tax. Out of this Rs 15 million were paid to minority shareholders of Kohinoor Raiwind Mills, an associate undertaking. The Board of Directors recommended payment of 5% dividend to shareholders of the company amounting to Rs 48 million. The shareholders were not paid any dividend for the year 2001.

MIRPURKHAS SUGAR MILLS

The mill located in Sindh seems to be victim of short supply of sugarcane and its higher price for the last many years. The company has posted Rs 97.8 million gross loss for the year ending September 30, 2002. Sales at Rs 516 million were not sufficient to cover cost of goods sold touching about Rs 614 million. The efforts to contain operating expenses and financial charges helped in containing losses. Despite that the company posted Rs 148 million loss as compared to a loss of Rs 44 million for the year 2001. As a result, accumulated losses at the end of September 2002 amounted to Rs 211.6 million. Unless the supply of sugarcane is not improved in Sindh the mills located in the province would continue to post losses.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

39.60

35.40

36.35

584,745,000

P.T.C.L.A

25.35

22.75

23.40

335,091,000

FFC Jordan

13.20

10.65

10.65

142,367,500

Sui North Gas

26.80

22.60

22.60

123,154,000

Fauji Fert

85.00

75.80

81.45

42,809,300

Engro Chem

97.50

84.70

89.00

35,788,200

I.C.I

61.00

49.75

49.75

33,758,100

National Bank

29.25

25.50

26.10

32,590,000

M.C.B.

41.00

35.50

35.50

9,160,500

Sui Southern Gas

19.50

15.85

15.85

3,436,500