There were substantial reductions in the main components of the revenue but the company succeeded in producing profit before taxation at Rs 139.44 million which was very close to previous year's figure of Rs 140.55 million which is highly commendable performance. The company announced cash dividend @15% similar to last year's.
At present the share in the company is trading at Rs 33.50 per share which is more than three times of the par value.
Askari Leasing Ltd (ALL) is a subsidiary of Army Welfare Trust which owns 57.6% of its total 32.4 million shares. ALL is a public limited company incorporated in Pakistan on 01 August 1993 and was granted certificate of commencement of business on November 3, 1993.
The company is listed on Karachi, Lahore and Islamabad Stock Exchanges and principally carries on the business of leasing. Its business includes equipment/machinery financing, auto financing and consumer finance. It also deals in certificates of investment. Apart from leasing business, the company has substantially large portfolio of investments. Although its core business remains leasing finance.
The other corporate entities of Army Welfare Trust are Askari Commercial Bank Ltd, Askari General Insurance Company Ltd, Mobile Askari Lubricants Ltd, Askari Aviation (Pvt) Ltd, Askari Information Systems Ltd, Askari Guards (Pvt) Ltd, Askari Associates (Pvt) Ltd.
On 30th June 2004, its lease finance portfolio amounted to Rs 6.299 billion as compared to Rs 6.448 billion the same date last year. This shows 2.3% decline as compared to last year's.
The company has entered into various lease agreements with mark-up return ranging from 8% to 18% per annum. The agreements are usually for a period of three to five years. The company in certain cases has security in addition to lease assets in the form of personal guarantees and charges on properties of lessees. Nearly 26.8% of the lease portfolio constitutes current maturities.
It can be reckoned based on market analysis that the older leases would have carried higher IRR (implicit rate of return). Hence higher income lease contracts would have included in the current maturities because lower IRR lease contracts in recent years.
On the other hand the last year's lease when amortised carry low income and relatively high principal amount. The age wise income analysis becomes important while projecting future profit of the company and at the same time doing risk analysis of the asset.
The note annexed to the account of states that net investment in lease finance include Rs 914.03 million (2003: Rs 737.6 million) respect of non performing leases on which mark-up is not being accrued. The non performing leases are determined in accordance with Prudential Regulations of NBFCs.
On 30th June 2004 lease portfolio constituted 78.9% of total asset whereas lease income during the year under review amounted to Rs 659.54 million which was 79.2% of gross revenue.
In spite of the odds, the company managed to disburse Rs 2.7 billion in its leasing business which includes a disbursement of Rs 1.9 billion in auto financing. Total disbursements during the year under review, therefore registered an increase of 19.4% as compared to previous year's.
The odds against which the lease marketing was done, were, surplus liquidity of low cost funds with commercial banks, coupled with low credit appetite and most importantly constant decline in the lending rates.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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June 30
2004 2003
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Share Capital-Paid-up: 324.00 324.00
Reserves: 450.12 528.48
Shareholders Equity: 774.12 852.48
L T Debts: - 23.11
Certificate of Investments: 3,146.53 4,211.49
Deposits On Lease Contracts: 1,232.05 1,084.21
Deferred Liability: 223.74 264.51
Current Liabilities: 2,605.60 1,823.15
Net Investments in Lease
Finance: 4,300.48 4,294.17
L T Loans: 3.75 4.15
L T Investments: 5.63 5.63
Investments Property: 36.53 41.10
Fixed Assets-Tangible: 50.71 46.23
Current Assets: 3,584.94 3,867.67
Total Assets: 7,982.04 8,258.95
Revenue, Profit & Pay Out:
Revenues:
Lease Income: 659.54 800.57
Income From Short Term
Investments etc: 167.65 239.20
Income From Bank Deposits: 0.88 5.94
Other Income: 4.51 10.60
Gross Revenue: 832.58 1,056.31
Finance & Bank (Charges): (526.09) (745.56)
General & Administrative Expenses:(141.58) (111.58)
Allowance For Potential
Lease Losses: (25.47) (54.62)
Provision For Impairment
Of Receivables: - (4.00)
Total (Expenditure & Provisions): (693.14) (915.76)
Profit For The Year: 139.44 140.55
Profit After Taxation: 109.13 117.15
Earnings Per Share: 3.37 3.62
Dividend Cash @ 15% (2003: @ 15%): (48.60) (48.60)
Share Price (Rs) Dated 14/02/05: 33.50 -
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Financial Ratios:
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Price/Earning Ratio: 9.94 -
Book Value Per Share (Rs): 23.89 26.31
Lease Income/Total Profit (%): 79.22 75.78
Investments Income/Total
Income (%): 20.14 22.64
Net Profit/Total Income: 13.10 11.09
R O E (%): 1.37 1.42
R O A (%): 2.03 1.82
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COMPANY INFORMATION: Chairman: Lieutenant General Masood Parwaiz (R); Chief Executive: Nasier Sheikh; Company Secretary: Zafar Alam Khan Sumbal; Registered Office/Head Office: 5th Floor, AWT Plaza The Mall, Rawalpindi Cantt; Web Address: www.askarilease.com Branch Network: Islamabad, Rawalpindi, Lahore, Faisalabad, Multan, Sialkot, Gujranwala, Peshawar, Karachi.