The company directors anticipate that buyout oil and gas sector will generate enough demand to expand its marketing activities. They target not only domestic but Middle East market. They also aspire to become premier manufacturer of seamless tubular products in the region.
The company's sales at Rs 621.60 million and gross profit at Rs 110 million and net profit at Rs 62 million are the highest figure in its history. This has also been followed by the market value of its share which has recently been quoted at Rs 60.80 per share and it is also the highest figure in its carrier. For the year under review the company announced dividend at 10% which is identical to last year's.
Huffaz Seamless Pipe Industries Ltd is a public limited company incorporated in the province of Sindh having its registered company located at Mashriq Centre, Gulshan-e-Iqbal Karachi. It was listed on Karachi Stock Exchange in 1986 and its shares are also quoted on Lahore Stock Exchange. The company is primarily engaged in the manufacturing and sale of seamless steel pipes, lubes (tubular products) and machinery tools. Its manufacturing facilities are located at Nooriabad (Sindh).
As regards ownership of its equity the directors of the company and some spouse own 22.43% of the company's total 12.2 million shares. The aggregate shareholding of General Public works out to 66.17% of its stock. Remaining stock is owned by institutional investors.
The share of the company is trading at the stock exchange at relatively high price. On December 9, 2005, the closing quotation of the share at Rs 60.80, highest price of last one year.
The historical statistics of the company under the title "Decade at Glance" gives elaborate information since 1996 but the data about profit distribution is not available.
The annual production capacity of seamless tubular products has been rated at 32,000 metric tonnes but actual production for the year under review has been recorded at 9020 metric tonnes showing substantial idle capacity. The output of machinery and machinery components was recorded at 1020 tonnes against annual capacity of 3050 metric tonnes. As regards special precision shafting's annual capacity 30,000 metric tonnes has remained unutilised in 2004 and 2005. The reason for lower production has been attributed to depressed demand as stated in the note annexed to the account.
But the directors in their report to the shareholders stated that demand in the local market for the company's products was higher as compared to the availability of good quality of raw material for production. They hope to take full advantage of this trend they are trying to get the raw material at economic cost.
Due to the growth in oil and gas sector, an increase in demand has been created. They also hope to target domestic as well as foreign market as they are equipped to produce different sizes because of their precised processes.
During the year under review, the company posted sales in terms of value at Rs 621.60 million registering 50.4% growth as compared to Rs 413.18 million booked in the preceding year. The sales figure is the record highest figure so is the performance of gross profit. Pre tax profit at Rs 76.25 million (2004: Rs 47.81 million) improved by 59.4%.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital-Paid-up: 122.00 122.00
Reserves & Surplus: 111.19 61.60
Shareholders Equity: 233.19 183.60
L.T. Debts: 139.87 117.44
Deferred Liabilities: 50.93 38.22
Current Liabilities: 361.76 207.99
Fixed Assets: 312.11 269.47
L.T. Deposits: 17.44 4.44
Current Assets: 456.20 273.34
Total Assets: 785.75 547.25
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Sales, Profit & Payout
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Sales: 621.60 413.18
Gross Profit: 109.95 58.14
Operating Profit: 83.05 41.87
Other Income: 3.52 3.63
Finance Charges: (6.30) (3.60)
(Depreciation): (25.69) (22.42)
Profit Before Taxation: 76.25 47.81
Profit After Taxation: 61.79 29.66
Earnings Per Share (Rs): 5.06 2.43
Dividend Cash Rs/Share: 1.00 1.00
Share Price (Rs) on 9-12-2005: 60.80 -
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Financial Ratios
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Price/Earning Ratio: 12.06 -
Book Value Per Share: 20.97 15.05
Price/Book Value Ratio: 2.90 -
Debt/Equity Ratio: 37:63 39:61
Current Ratio: 1.26 1.31
Asset Turnover Ratio: 0.79 0.76
Days Receivables: 30 30
Days Inventory: 218 155
Gross Profit Margin (%): 17.68 14.07
Net Profit Margin (%): 9.94 7.15
R.O.A. (%): 7.86 5.42
R.O.C.E. (%): 14.57 8.74
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Plant Capacity & Production
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Installed Production
(Thousand M. Tonnes) Annual Capacity 2005 2004
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Seamless Tubular Products: 32.00 9.02 8.37
Special Precision Shafting: 30.00 - -
Machinery & Machinery Components: 3.50 1.02 0.53
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"The reasons for lower production are depressed demand of seamless products in the country due to prevailing economic conditions and unavailability of export market at viable prices."
COMPANY INFORMATION: Managing Director & Chief Executive: Hafiz Abdul Majid; Director: Hafiz Abdul Waheed; Company Secretary & General Manager Finance: Abdul Hafeez Khan FCMA; Chief Financial Officer: Syed Zakir Ali ACA, ACMA; Registered Office: 207-210, Second Floor, Mashriq Centre Block-14, Gulshan-e-Iqbal Karachi 75300; Web Address: www.huffaz.com Factory: 90 km Super Highway Nooriabad Industrial Estate Distt. Dadu, (Sindh).