STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated March 27, 2004

 

Almost all the IPPs have announced their half yearly results. During this period the thermal power plants witnessed a lower production factor owing to the increase in the water level at the local dams. However, the situation has changed completely as the water levels at Tarbela and Mangla have dropped to 'dead levels'. In such a scenario thermal power plants are expected to become the major source of energy. As the load factor for thermal power plants begins to rise so will their revenue and the earning base. The shortfall in water availability is expected to continue 

 

 

 

 

for considerable time and improve the earnings of IPPs. Therefore, enhancing stake in IPPs may not be a bad proposal. However, investors must pick the scrips very carefully.

ADAMJEE INSURANCE COMPANY

The Supreme Court decision would allow Muslim Commercial Bank (MCB) to participate in the election of directors in the annual general meeting of Adamjee Insurance Company. The Supreme Court has dismissed the petition of Adamjee Insurance Company, which had alleged that MCB was attempting to take over the company by accumulating shares. A 16-month-old stay against the holding of the annual meeting of the company until the disposal of the appeal was also set aside by the Court.

PAK SUZUKI MOTOR COMPANY

The company has posted Rs 1,570 million profit after tax for the year ending December 31, 2003 as compared to Rs 850 million for last year. The Board of Directors approved distribution of 30% dividend, same at the level of last year. The improvement in bottom line can be attributed to increase in sales, going up from Rs 10,994 million to Rs 18,484 million. Gross profit almost doubled as compared to last year, going up from Rs 1,388 million to Rs 2,643 million. The benefit of higher gross profit was eroded to some extent due to decrease in other income and increase in financial and other charges. Other income came down from Rs 242 million to Rs 184 million. Financial and other charges went up from Rs 122 million to Rs 216 million. The general perception was that with growing competition in smaller cars category, the sales may come under pressure. However, with auto loans being made available at reasonable interest rates, the company would continue to enjoy strong demand for cars.

DEWAN FAROOQUE MOTORS

According to market reports the company is currently negotiating a major deal with an undisclosed client and this contract would pave way for huge supply of Santro cars starting from June 2004. This is expected to improve the bottom line from the end of fourth quarter of current financial year. According to a report from capital One Equities, the scrip is trading at a PER of 13.8x based on its prospective earnings for current financial year estimated around Rs 2.5/share, which is quite high compared to other auto sector companies. The opinion is that the future prospects of the company are positive. However, until the above mentioned deal is finalized investors must not feel too bullish about the company.

WYTH PAKISTAN

The company has posted Rs 301.6 million profit after tax for the year ending December 31, 2003 as compared to Rs 244.8 million profit for last year. EPS improved from Rs 172.19 to Rs 212.12. Out of this profit the proposed 25% dividend would amount to Rs 35.5 million and balance would be transferred to general reserve. The improvement in bottom line can be attributed to a number of factors that include cost optimization and no amortization of restructuring cost during year 2003. The company had amortized about Rs 25 million during year 2002. The management was able to contain cost of goods sold, administrative and selling expenses and financial charges. Cost of goods sold came down from Rs 1,204 million to Rs 1,113 million. Administrative and selling expenses declined from Rs 358.4 million to Rs 344.7 million. Financial charges went down from Rs 30 million to about Rs 8 million.

HIGHNOON LABORATORIES

The company has posted Rs 36 million profit after tax for the year ending December 31, 2003 as compared to about Rs 35 million profit for last year. The Board of Directors also approved distribution of 25% dividend amounting to Rs 25.4 million. The payout for year 2002 amounted Rs 13.8 million. Sales went up from Rs 776.5 million to Rs 885.2 million. Gross profit improved from Rs 298.8 million to Rs 338.4 million. However, the benefit of higher gross profit was eroded due to increase in operating expenses, going up from Rs 210 million to Rs 244 million. Provision against tax for year 2003 was more than double of that of last year, going up from Rs 10.8 million to Rs 27.5 million. However, reduction in financial and other charges, going down from Rs 48 million to Rs 36 million, contained further reduction in profit after tax.

Company High  Low Closing Week's Turnover

Oil&Gas Dev.XD

59.05

56.35

58.25

386,317,800

P.T.C.L.A XD

41.15

39.65

40.75

204,607,500

National Bank

64.20

58.15

64.20

149,128,400

Hub Power

38.45

37.90

38.45

55,553,500

M.C.B. XB

51.75

47.75

51.75

44,858,400

Engro Chem.XD

102.00

96.40

101.85

43,094,200

P.S.O.XD

287.25

286.20

287.25

24,814,100

Pak.PTA Ltd.

17.50

17.10

17.20

20,792,000

Fauji Fert.XD

112.80

110.25

111.55

12,132,900

I.C.I.

85.25

83.95

85.25

10,119,100