The reduction in the import duty of Polyester Filament Yarn (PFY) exerted immense pressure on the company's selling price of PFY.
On the other hand main polyester raw material prices (PTA/MEG/CHIPS), during the year also increased.
Salaries, wages and utilities cost also increased at their normal yearly pace all these factors led to reduction in the gross profit margin compared to last year.
The situation in PFY business with the reduction in import duty on PFY (many units already closed down) would continue to drag down the results of the company.
The company posted net profit after taxation at Rs 294.39 million showing 28.6% decline as compared to the preceding year's Rs 349.13 million.
But company's cash dividend @55% was identical to last year's. Lower financial charges due to lower mark-up and lower borrowing remained shield for the company.
Gatron Industries Limited is a public limited company incorporated in the province of Balochistan.
The registered office of the company is located in Ahmed Complex Jinnah Road Quetta. Its shares are quoted on all stock exchanges of the country. It was listed at Karachi Stock Exchange in 1992.
The company is primarily engaged in the manufacturing of polyester polymer and its various downstream products viz. filament/texturised polyester yarn, polyester chips bottle grade (P.E.T. Resin) and polyester preforms.
It is a large capital intensive enterprise of H.I.T.E Hub Chowki, Distt. Lasbela Balochistan.
On 30-06-2003 it had fixed asset base of Rs 3.991 billion at cost. During financial year 2002-03, the company made additions in the fixed assets to the extent of Rs 33.28 million as compared to Rs 103.51 million in the preceding year.
In addition the company has booked capital work-in-progress in the sum of Rs 89.88 million.
The company's 100% wholly owned subsidiary Gatro Power earned a net profit of Rs 22.67 million.
The turbine and steam boiler installed in Gatro Power to supply power to Gatron commenced production in September 2003.
This will replace the 20 years old obsolete furnace oil generators. This will produce power with much lower costs on gas cogeneration with better efficiency.
The results of Gatro Power would reflect on the ongoing financial year since Gatron would now be purchasing over 50% of its energy requirement from Gatro Power.
During the year under review, the company's production of polyester yarn was recorded at 32.82 thousand metric tons as against 33.30 thousand metric tons produced in the preceding showing 1.4% decline.
However the capacity utilisation remained high at 141.3%.
The output Polyester Chips Bottle Grade increased by 3.2% to 27.93% thousand metric tons from 27.07 thousand metric tons. The utilised capacity works out 109.52%.
Polyester P.E.T. preforms output increased to 83.7 million pieces from 62.9 million pieces in the preceding year.
The output figures include production arranged under the contract from outside sources and self consumption for manufacturing of polyester P.E.T preforms.
During the year under review the company generated sales in the sum of Rs 4,536.92 million as against Rs 4,539 million in the preceding year.
Export sales increased to Rs 1,047.99 million from Rs 947 million in the preceding year. It has been reported that the polyester filament yarn (PFY) sales and results were badly affected by the reduction in the import duty on PFY from 25% to 20% in early December 2002.
However increase in the sales and exports of preforms as well as sale of PET resin lent some support to the final total sales of the company. If the company was dependent only on Polyester Filament Yarn, the final results could have greater negative impact compared to the last year.
Due to the presence on the sales of filament yarn despite utmost effort to move volume by reducing prices the company was still forced to reduce the production. As such the actual production was lower than last year.
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Performance Statistics (Million Rupees)
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30 June 2003 2002
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Share Capital-Paid-up: 383.64 383.64
Reserves & Surplus: 1,547.51 1,464.13
Shareholders Equity: 1,931.15 1,847.77
L T Debts: 6.56 62.94
Deferred Liabilities: 394.16 412.66
Current Liabilities: 1,953.51 1,771.97
Fixed Assets-Tangible: 1,690.34 1,761.16
L.T Investments: 420.50 268.00
L.T Loans & Deposits: 12.96 45.14
Current Assets: 2,161.58 2,021.04
Total Assets: 4,285.38 4,095.34
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Sales, Profit & Pay Out
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Net-Sales: 4,536.92 4,539.01
Gross Profit: 591.35 741.35
Operating Profit: 442.30 607.45
Other Income: 13.67 14.31
Financial (Charges): (66.96) (145.33)
(Depreciation): (183.51) (200.49)
Profit Before Taxation: 364.69 448.20
Profit After Taxation: 294.39 349.13
Dividend Cash @55 (2002:@55%): (211.00) (211.00)
Earnings Per Share (Rs): 7.67 9.10
Share Price (Rs) Dated 12-2-2004: 136.00 -
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Financial Ratios
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Price/Earning Ratio: 17.73 -
Book Value Per Share: 50.34 48.16
Price/Book Value Ratio: 2.70 -
Debt/Equity Ratio: 0:100 3:97
Current Ratio; 1.10 1.14
Asset Turnover Ratio 1.06 1.11
Days Receivables: 41 39
Days Inventory: 107 108
Gross Profit Margin (%): 13.03 16.33
Net Profit Margin (%): 6.49 7.69
R.O.A (%): 6.87 8.52
R.O.C.E (%): 12.62 15.02
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Plant Capacity & Production
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A) Polyester Yarn (000 Metric Tons)
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Annual Capacity: 23.22 23.22
Actual Production: 32.82 33.30
Capacity Utilisation (%): 141.34 143.41
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B) Polyester Chips Bottle Grade
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(Pet Resin) (000 Metric Tons)
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Annual Capacity: 25.50 25.50
Actual Production: 27.93 27.07
Capacity Utilisation (%): 109.52 106.16
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C) Polyester P.E.T Preforms Million Pieces
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Annual Capacity: 86.10 86.10
Actual Production: 83.70 62.86
Capacity Utilisation (%): 97.21 73.01
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COMPANY INFORMATION: Chairman: Haji Haroon Tayub; Chief Executive: Peer Mohammad Diwan; Director: Haji Sharif Tayub; Company Secretary: Mohammad Yasin Bilwani; Chief Financial Officer; Rizwan Diwan; Registered Office: Ahmed Complex, Jinnah Road Quetta; Factory: Plot No. M-2 Sec M. H.I.T.E. Main RCD Highway, Hub Chowki Lasbela Distt. Balochistan; Liaison/Correspondence Office: 8th Floor, Textile Plaza, M.A. Jinhha Road/Dunolly Road Karachi.