(Warid Telecom of UAE, Telenor of Norway). New orders made a quantum jump to a record increase of 90% over the last year. Orders in hand at the end of the year depict healthy outlook. Gross profit increased by 20% in absolute terms but qualitatively it dropped from 17.9% of sales in the last year to 17.6% this year.
The price surge of steel and copper made an adverse impact on its margins as the increased cost could not be passed on the customers. International competition also lowered the margin. Profit before taxation increased by 23% compared with last year in absolute terms. There was increased commission and allowances received.
Siemens (Pakistan) Engineering Company Limited is incorporated as a public limited company having its registered office, head office and plant located at B-72 Estate Avenue, S.I.T.E. Karachi. Its shares are quoted on the Karachi, Islamabad and Lahore Stock Exchanges. It was listed at Karachi Stock Exchange in 1978.
The company is principally engaged in the manufacture, installation and sale of electronic and electrical capital goods and also executes projects under contracts. Siemens Aktiengesellschaft, Germany (Siemens AG) holds 64% of Siemens Pakistan's total 7.77 million paid-up shares of Rs 10 each. After that NBP Trust Department. (NIT) owns 25.52% of the company's stock. Siemens AG nominees are represented on its Board of Directors.
It is rare in Pakistan that participation of foreign members of the Board is ensured through video conferencing. In case of Siemens Pakistan the participation of its foreign members of the Board was facilitated through video conferencing when they were unable to visit Pakistan, as SECP has allowed the use of this media.
This is a blue chip company as its share carries very high premium on trading at stock market. On 28-12-2004 the closing price of its share was quoted at Rs 565 per share which is more than 56 times of the par value. During the last one year the price of the share nearly doubled from Rs 341.05 to Rs 628 per share.
One of the reasons of high price of the share is its very attractive profit distribution policy. For the year under review the company declared interim dividend at 200% and final dividend at 300%.
During the financial year October 30 2003 to September 2004, the company's sales increased by 22.33% to Rs 7.110 billion from Rs 5.812 billion, posted in the preceding year. The major increase in sales was from its two business divisions - Information & Communications and Power Transmission & Distribution.
The Information and Communication Division comprises carrier services and fixed networks. Its professionals have experience of building and maintaining telecommunication networks. They are well versed in networks of every type including latest developments in IP convergence, IP Routing, Broadband Access and optical networks.
The company continued to provide services to their longstanding customers PTCL and NTC. The notable contribution is end to end implementation of WorldCall's LDI system with two Soft Switches and countrywide deployment of Media Gateways. In the Information and Communication Division the other most important activity was the launch of 65 series of Siemens Mobile phone which proved successful leading to further market penetration.
It was a year of growth of Pakistan Mobile Telephony as the market expanded from four to six operators. Two new operators are Telenor of Norway and Warid Telecom of UAE. Siemens was awarded the contract of Telenor for major part of the project. Siemens was also selected by Ufone as a second vendor for full turnkey projects.
In the power generation and distribution Siemens Pakistan made a major breakthrough when it was qualified by Dubai Electricity and Water Authority (DEWA) for turnkey high voltage substations. After a tough international competition Siemens Pakistan succeeded in acquiring the orders for the construction of three substations for DEWA and two substations for private property developers of Dubai.
Consortium of Siemens Pakistan and Siemens AG received letter of Award from Wapda for the turnkey construction of first 500KV GIS substation in Wapda's network. The substation shall provide interconnection between the Hub Power Plant and KESC network. Siemens Pakistan played the key role in arranging the financing of Rs 1.8 billion for this project from a local bank for Wapda. The company has completed a number of substation projects in Kabul.
Siemens Pakistan is the largest production centre for distribution as well as power transformers in Pakistan serving very successfully the whole of Pakistan, Saudi Arabia, Kuwait, Yemen, Philippines and Afghanistan.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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Sept 30
2004 2003
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Share Capital-Paid-up: 77.70 77.70
Reserves & Surplus: 2,070.61 1,813.44
Shareholders Equity: 2,148.31 1,891.14
Retention Money Payable 3.05 -
Employees' Long Service Bonus: 7.21 6.79
Current Liabilities: 2,831.96 2,476.74
Property, Plant Equipment: 525.46 496.69
Intangible Assets: 43.30 1.07
Deferred Tax Assets: 125.40 128.31
L T Receivables: 52.88 29.44
Current Assets: 4,243.49 3,719.16
Total Assets: 4,990.53 4,374.67
Sales, Profit & Pay Out
Net Sales: 7,110.46 5,812.13
Gross Profit: 1,252.14 1,042.68
Commission &
Allowances Earned: 214.39 126.97
Operating Profit: 786.63 622.88
Other Operating Income: 63.00 64.61
Financial (Expenses): (39.60) 35.57
(Depreciation) & Amortisation: (116.51) (98.76)
Profit Before Taxation: 760.72 616.92
Profit After Taxation: 412.56 349.97
Earning Per Share (Rs): 53.10 44.89
(Dividend Cash): (388.48) 202.01
Share Price (Rs) Dated 28/12/04: 565.00 -
Financial Ratios:
Price/Earning Ratio: 10.64 -
Book Value Per Share: 276.50 243.38
Price/Book Value Ratio: 2.04 -
Debt/Equity Ratio: 0:100 0:100
Current Ratio: 1.50 1.50
Assets Turn Over Ratio: 1.42 1.33
Days Receivables: 49 73
Days Inventory: 99 121
Gross Profit Margin (%): 17.61 17.94
Net Profit Margin (%): 5.80 6.02
R O A (%): 8.27 8.00
R O C E (%): 19.11 18.43
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COMPANY INFORMATION: Chairman: Syed Babar Ali; Chief Executive Officer: Sohail Wajahat Siddiqui; Chief Financial Officer & Director: Gerhard Wilcke; Company Secretary: Muhammed Haleem Khan; Registered Office, Head Office & Plant: B-72, Estate Avenue, S.I.T.E. PO Box No 7158 Karachi-75700; Web Address: www.siemens.com.pk Other Offices: Lahore Regional Office: State Life Building, 15-A, Sir Aga Khan Road P.O. Box No 293 Lahore-54000; Islamabad Regional Office: 23 West Jinnah Avenue, P.O. Box No 1129, Islamabad-44000; Quetta Representative Office: 46-Rustam Building, Patel Bagh Off: Quary Road, PO Box No 21 Quetta-87300; Peshawar Representative Office: 6th Floor State Life Building, The Mall, PO Box No 341 Peshawar-2500.