ICI Pakistans resilient financial performance over the year underlines its fundamental strength. The companys net profits jumped 16 percent during the first half 2009; as despite 1 percent fall in top line, its margins remained stable at 19 percent, while finance cost nearly halved during the period. The company also announced interim cash dividend of Rs 3.50 per share for year ended December 2009.
The firms gross profit remained flat, despite the fact that it faced problems in industrial segment due to termination of business agreement with Kansai - a high net worth foreign client - as well as declining auto sales. However, demand for soda ash and PSF - high margin products - enabled the firm to offset the impact of decreasing industrial sales.
But the big push to bottom-line growth came from 58 percent decrease in financial charges owing to low cost of borrowing coupled with less working capital required during the period. Profits were also augmented by 116 percent increase in other income.
The company has acquired AkzoNobel - the worlds largest coating supplier - in order to reap benefits from through synergies and introduce new products in the lucrative paint segment. Despite the slowdown in economy, ICI has shown elastic performance with its diversified products mix and looks set to go a long way, led mainly by PSF and soda ash segment.
===================================================================
ICI P&L
===================================================================
Rs (mn) 2QCY09 2QCY08 (+/-)% 1HCY09 1HCY08 (+/-)%
===================================================================
Sales 7162.855 7431.982 -4% 13,886 13,976 -1%
COGS 5606.146 5952.375 -6% 11,199 11,289 -1%
Gross profit 1556.709 1479.607 5% 2,687 2,687 0%
Gross Margin 22% 20% 9% 19% 19% 1%
Other Income 188.496 55.959 237% 230 106 116%
Finance cost 42.764 82.073 -48% 77 182 -58%
PAT 682.811 516.65 32% 1,026 881 16%
EPS(Rs) 4.92 3.72 32% 7.39 6.35
===================================================================
Source: Company Results
All information and data used are from reliable source(s) and subjected to extensive research after diligent and reasonable efforts to determine the soundness of the source(s). This analysis is not for the benefit of or discredit to any person, scrip or tradable instrument. The content(s) of this analysis shall not be construed as an advice or recommendation to trade. No relationship of client will be created between Business Recorder and user of this information. Professional advice must be taken by the reader before making investment/trading decisions. BR disclaims any liability for investment(s) made or liability accrued on basis of this analysis. The content(s) including all opinion(s), statement(s) and information are subject to change without prior notice and/or intimation.
Comments
Comments are closed for this article.