Bulleh Shah Paper Mill doing well for Packages

Packages Limited is riding the wave of sales growth this year as is evident by a phenomenal growth in the firms turnover half year period ending June.
The real driver behind this has been the companys export sales which increased by a whooping 221 percent over the same period last year - all thanks to the firms Bulleh Shah Paper Mill that started functioning in 2007 and has been doing very well, particularly since last year, as told by an official at the company.
With the new paper mill manufacturing mainly liner and fluting, types of packaging materials, exports to the Middle East and other Asian countries have increased, particularly to the UAE and Sri Lanka.
Heightened distribution and marketing costs are also a result of the efforts towards enhancing export sales of the company.
Though cost of sales increased significantly owing to a rise in pulp prices over the previous months, it was offset to a considerable extent by improved sales which brought up the gross profit by 440 percent.
The firms net profits depicted a decline of around 100 percent over the same period last year, but this was mainly due to the high base effect over 1HCY09 because of the disposal of investment in Tetrapak Pakistan Limited.
Outlook for the companys future seems to be very positive. The management believes that further improvement in the bottomline will be witnessed as capacity utilization of the new machineries installed at the Bulleh Shah Mill will enhance with time.
"Currently the machines are running at 30-35 percent capacity, we expect that to increase to 65-70 percent by the end of this year," said an official at Packages Limited.
An expected declining trend of international pulp prices in the coming months is also believed to be of benefit to the company as wood pulp is a major raw material for manufacturing paper products.
Add to this the increase in demand of packaged goods after the floods, and the management is very optimistic for the company. Seems like Packages will have a rosy tale to tell in the months to come.

============================================================

PKGS P&L

============================================================

(Rs mn)                         1HCY10       1HCY09    % chg

============================================================

Sales                            9,761       6,671       46%

Cost of sales                    9,124       6,553       39%

Gross profit                       637         118      440%

Administrative expenses            260         237       10%

Distribution & marketing           293         197       49%

Other operating income             111         197      -44%

Finance costs                      596         669      -11%

Investment income                  790       9,028      -91%

PAT                                279       4,166      -93%

EPS (Rs)                          3.30       49.38

============================================================

Source: KSE notice