In this period the market value of the share increased from Rs 107.85 per share to Rs 174.95 per share. Apart from buoyant stock market index, and its inherent strong financial and operational fundamentals, the prime mover of its share has been its very attractive profit distribution profile.
For the year under review the company declared cash dividend at 130% and bonus stock dividend at 50%. The cumulative dividend become 180% - bonanza for shareholders.
Millat Tractors Limited is incorporated in Pakistan and is listed on Karachi, Lahore, Islamabad Stock Exchanges. Its registered office and factory is situated at Sheikhupura Road, District Sheikhupura, Punjab. It is engaged in assembly and manufacture of agricultural and industrial tractors, implements and equipments.
The company has also three subsidiaries namely Bolan Casting Ltd (BCL), Millat Equipment Ltd, Millat Industrial Product Private Ltd.
BCL provides major casting for automobile industry and also 50% requirement of the company are met from it. BCL has been declaring very reasonable dividends for the last three years.
Millat Equipment Ltd was incorporated in 1993 as a wholly owned subsidiary company of Millat Tractors Limited for commercial vehicle production.
Millat Industrial Product (Pvt) Ltd has a capacity to produce 60,000 automobile batteries per annum and it is reported that it has not yet resumed operation. Originally it was named Rex Barren Batteries and acquired by submitting highest bid to the Corporate Industrial Restructuring Corporation (CIRC).
The directors, their spouses etc of Millat Tractors Ltd held 25.3% of total 8,009 million shares of the company. NIT, PICIC Com Bank, MCBL, State Life Insurance, New Jubilee Insurance aggregate holding of the company's stock works out to 18.4%. One foreign company is holding 8.6% and three trusts are holding 7.9% of the company's stock. Its 1950 individual shareholders own 37.6% of the stock.
Millat Tractors Ltd is an ISO 9002 Certified Company for its assembly plants, material testing and guage control laboratories. The company emphasises that it is Pakistan's leading engineering concern in the automobile sector.
It is manufacturing Massey Ferguson Tractors under licensing agreement within AGCO Limited UK and diesel engines in technical collaboration with Perkins Ltd UK. The company is also manufacturing diesel generating sets and prime movers using Perkins engines. It is also manufacturing fork lifts under licence with Anhui Heli Company Ltd, China and a range of agricultural implements.
On the basis of single shift operation the annual capacity of its plant has been rated at 15,000 tractors. During the year, the company produced 19,132 units reaching 127.55% of the capacity utilisation and 35.6% growth over the production of 14,103 units in the preceding year.
This is record highest output in its history. In terms of volume sales the company achieved 34% growth over the previous year which is a little more than the industry growth rate in sale.
In terms of value the company's sales amounted to Rs 6.984 billion as against Rs 5.26 billion in the previous year registering 32.7% growth over the preceding year. Gross margin growth rate was lower as it increased by 29.8% showing primarily pressures on margins.
Financial charges were substantially slashed. Hence pretax profit increased to Rs 595.34 million by 45.07% over the preceding year's.
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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: 80.09 80.09
Reserves & Profit: 1,402.63 1,112.13
Shareholders Equity: 1,482.72 1,192.22
Unrealised Gain on Revaluation of Investment:
Revaluation of Investments: 25.78 19.09
Accumulating Compensated Absences: 11.60 17.98
Deferred Tax Liability: - 2.50
Current Liabilities: 2,032.23 1,385.48
Tangible Fixed Assets: 227.70 245.59
L T Investments: 164.88 135.76
L T Loans: 4.10 4.22
Deferred Tax Assets: 7.16 -
Current Assets: 3,148.49 2,231.70
Total Assets: 3,552.33 2,617.27
Sales, Profit & Pay Out
Sales: 6,984.92 5,260.79
Gross Profit: 847.34 652.41
Operating Profit: 619.81 457.47
Other Income: 46.23 45.25
Financial (Charges): (11.18) (34.15)
(Depreciation): (31.42) (33.10)
Profit Before Taxation: 595.34 410.09
Profit After Taxation: 394.62 265.61
Dividend Cash @ Rs13/Share
(2003: @ Rs 16/Share): (104.12) (128.14)
Propose Bonus Stock 1:2: (40.05) -
Earnings Per Share (Rs): 49.27 33.16
Share Price (Rs) on 14/02/05: 247.00 -
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Financial Ratios
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Price/Earning Ratio: 5.01 -
Book Value Per Share: 185.34 149.03
Price/Book Value Ratio: 1.33 -
Debt/Equity Ratio: 0:100 0:100
Current Ratio: 1.59 1.61
Assets Turnover Ratio: 1.97 2.01
Days Receivables: 6 10
Days Inventory: 83 64
Gross Profit Margin (%): 12.13 12.40
Net Profit Margin (%): 5.65 5.05
R.O.A (%): 11.11 10.14
R O C E (%): 25.96 21.56
Capacity & Production of Tractors (No Of Units):
Capacity (Single Shift): 15,000 15,000
Actual Production: 19,132 14,103
Capacity Utilized (%): 127.55 94.02
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COMPANY INFORMATION: Chairman & Chief Executive: Sikandar Mustafa Khan; Director & Chief Financial Officer: Latif Khalid Hashmi; Company Secretary & Director: Mian Muhammad Saleem; Registered Office & Plant: Sheikhupura Road; District: Sheikhupura; Web Address: www.millat.com.pk