The company's breakup value of the share is below par because of increase in the accumulated deficit. Its share is also being quoted at much below par value. The company has not been able to declare dividend since quite some time.
However there is strong positive side also which reflects many achievements. The company has expanded its production capacity which has enabled it to execute existing contracts of more than a billion rupees. It has also succeeded in conducting BRR (Business Process Re-engineering) and implementing Information Technology to develop in-house capability to maintain, develop and enhance computer based applications. The declining profitability during the year under review has been mainly due to increase in the international prices of copper (main raw material of company's product) because of strong demand from China.
The other reason is increase in oil prices.
Pakistan Telephone Cables Ltd is a public limited company incorporated in the province of Balochistan. It is quoted on the stock exchanges in Karachi and Lahore. It was listed at Karachi Stock Exchange in 1985. On December 26, 2005, the closing quotation of the company's share price was recorded at below par value at Rs 7.15 per share. During the last one year market value of its share had peaked at Rs 13.25 which is 32.5% above the par value.
As regards break-up value of the share substantial accumulated deficit has eroded the shareholders equity base, lowering break up value of the share at Rs 2.80 per 10-rupee share.
While studying the equity ownership profile from the pattern of shareholding dated June 30, 2005, it can be observed that more than 62% of the company's shares are owned by the Directors, their spouses and children. One associated undertaking Bin Bak Industries (Pvt) Ltd owns 12.9% of its stock. Its 1610 individual shareholders held 6.2% of the company's stock.
As regards profit distribution the six years stakeholders information shows that the company has not been able to declare dividend since year 2003 possibly because since then its earnings per share remained in the red.
The company is primarily engaged in the manufacture and sale of telecommunication cables mainly to Pakistan Telecommunication Ltd.
During the year under review the installed production capacity of the plant has been enhanced to 860.6 thousand conductor core km (CCKM) from 628.4 thousand CCKM reflecting 37% increase. During the year under review the actual output reached 171% of the capacity (2004: 126%).
It has been reported that the production capacity in relation to past records achieved more than sanctioned capacity which was made possible by new plant. Now the annual production capacity of the plant has gone up to one million CCKM.
The new plant has started commercial production and would enable the company to execute existing contracts valuing Rs 1057 million. The workforce of the company consist mostly technical personnel as the project is Hi-tech. Moreover the company is conducting its business process with the Information Technology. It manages its financial activities with the software package developed by system development services.
The management has planned to modify its existing computer software package in order to meet the requirement information.
The company wants to develop in-house capability by training employees to maintain, modify and enhance existing computer based applications.
On the other hand the management has implemented the BPR (Business Process Re-engineering) of all its business processes so as to enable it to resolve various issues of relevance, duplication, time lags, ownership prudence of process and thus implant best practices for achieving corporate excellence.
The company's commitment to increase quality of the product conforming to stringent international specifications, has led to re-certification for its Quality Control Laboratory with ISO 9001:2000 Quality Control Management System.
The statutory auditors of the company have made certain observations about company's Corporate Guarantee on behalf of its associated company ie Plaza Company (Private) Ltd amounting to Rs 35.679 million.
The directors assured that the negotiation was continuing and was about to be finalised within a month.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital-Paid-up: 210.00 210.00
Accumulated (Loss): (151.23) (103.09)
Shareholders Equity: 58.77 106.91
Surplus on Revaluation
of F/A: 144.46 47.10
L.T. Debts: 4.78 13.08
Deferred Liabilities: 151.75 51.27
Current Liabilities: 283.26 137.83
Fixed Assets: 339.55 179.08
Intangible Assets-Computer Software: - 0.01
L.T. Security Deposits: 4.58 3.81
Current Assets: 298.89 173.29
Total Assets: 643.02 356.19
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Sales, Profit & Pay Out
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Sales: 682.77 440.82
Gross Profit: 49.33 55.94
Operating Profit: 17.50 18.56
Finance (Charges): (12.40) (8.25)
(Depreciation): (15.82) (14.85)
Other Income: 0.52 0.04
Profit Before Taxation: 5.34 9.84
(Loss)/Profit After Taxation: (52.66) 11.89
(Loss)/Earning Per Share (Rs): (2.51) 0.57
Share Price (Rs) on 26/12/05: 7.15 -
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Financial Ratios:
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Price/Earning Ratio: - -
Book Value Per Share: 2.80 5.09
Price/Book Value Ratio: 15.04 -
Debt/Equity Ratio: 2:98 12:88
Current Ratio: 1.06 1.26
Asset Turn Over Ratio: 1.06 1.23
Days Receivables: 22 28
Days Inventory: 87 75
Gross Profit Margin (%): 7.22 12.68
Net Profit Margin (%): (7.72) 1.54
R.O.A (%): (8.19) 3.34
R.O.C.E (%): (14.64) 5.4
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Plant Capacity:
"Installed Capacity as sanctioned by I.B.P. is 502,000 conductor core kilometers. During the year, capacity has been achieved at 171% (2004: 126%) against the installed capacity, as 860,637 (2004: 628,375) conductor core kilometers (CCKM) were produced for various types of telephone cables. The Production capacity in relation to past record achieved more than sanctioned capacity were made possible by new plant which was transferred from capital work in progress and new capacity is estimated to be 1,000,000 conductor core kilometers which is yet to be approved by I.B.P."
COMPANY INFORMATION: Chairman/Chief Executive: Raza Abdul Aziz Al-Raee; Director: Riyadh Abdul Aziz Al-Raee; Chief Financial Officer: Aftab Safder Cheema; Company Secretary: Muhammad Azhar Jamali; Registered Office: 18th Mile RCD Highway 27/3/2 Mouza Bairut-Tehsil Hub District Lasbela Balochistan; Web Address: Not Reported; Head Office: E-3, Block-17 Al Raee Avenue Gulshan-e-Iqbal Karachi.