The price of share of the company improved from below par at Rs 7.5 per share to Rs 19.46 during the last one year. On 25th March the closing price of the share was recorded at Rs 18.50 per share carrying 85% premium over the par value of Rs 10. But the statutory auditors of the company without qualifying their opinion, made some sour observations some of which are about net loss for the year under review, shareholders equity in negative figures and the current portion of long term liabilities reaching Rs 101.23 million. The management's response is there in the note 1.2 annexed with the account.
It has been reported that the new season 2004-05 has started on a very positive note as price of sugar registered sharp increase. This trend is not only confined to Pakistan but international prices are also high. The company has been able to fetch good price on its unsold stock which will support the profitability and viability of the enterprise.
Fecto Sugar Mills Ltd is a public limited company incorporated in September 1964, in the province of Sindh. The company is principally engaged in the manufacture and sale of sugar and also operates a particle board unit. It is listed on Karachi and Lahore stock exchanges. Its manufacturing facilities are located in the province of Punjab at Darya Khan District Bhakkar.
The sugarcane crushing season of the company started on 4th December 2003 and lasted for 142 days (2002-03 season 149 days) upto 24th April 2004. During the season under review, the company crushed 722.5 thousand metric tonnes of sugarcane as against 709.9 thousand metric tonnes in the preceding season registering 1.8% increase in the output.
The production of sugar, during the year under review was recorded 60.21 thousand metric tonnes as compared to 50.14 thousand metric tonnes produced in the preceding year registering 20.1% increase over the preceding year. The higher growth in sugar output compared with increase in output seems to be due to many factors one of which is substantial increase in sucrose recovery. During the period under review the sucrose average recovery works out to 8.33% as compared to 7.04% in the preceding year.
It has been reported that the year 2003-04 was a mixed season for the sugar industry - both better and at the same time difficult one.
On a positive note the bumper sugarcane crop combined with higher sucrose recovery enabled the industry to produce highest ever sugar in its history. This bumper crop also became burdensome as the huge carryover stock of previous year alongwith record production of current year created a situation never witnessed before in the domestic sugar market. The ex-mill sugar prices hit a steep decline of Rs 13 per kg without sales tax.
On top of it, the industry faced the government fixed procurement price @Rs 40 per 40 kg of sugarcane regardless of the quality of sugarcane and selling price plummeting below cost of production.
During the year the company generated sales revenue at Rs 723.59 million as against Rs 728.71 million showing almost stagnation reaching the level of the preceding financial year. According to six years statistics, the revenue is the third lowest and gross profit is fourth lowest. The small gross profit could not fully absorb its operating expense of Rs 43.5 million. Resultantly it booked operating loss at Rs 24.49 million (2002-03 Rs 118.48 million).
Financial costs of Rs 62.34 million further aggravated the situation. So the company booked pretax loss at Rs 80.88 million compared to Rs 192.42 million posted in the preceding year. In both the years under comparison, the company's tax provisions were favourably written back.
Accordingly, after tax profit lowered at Rs 72.23 million (2002-03: Rs 148.57 million). The company recorded loss for the second consecutive year and it recorded loss for three years out of six years.
It is reported the forthcoming year started with positive indications.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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September 30
2004 2003
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Share Capital-Paid-up: 50.30 50.30
Accumulated (Loss): (491.81) (440.39)
Shareholders Equity: (441.41) (390.09)
Surplus on Revaluation
of Fixed Assets: 373.69 394.50
Sub-ordinated Loan: 451.00 451.00
Other L.T. Debts: 578.20 231.99
Deferred Taxation: 125.77 136.98
Current Liabilities: 585.51 676.78
Tangible Fixed Assets: 1,153.01 1,188.86
L T Investments: 54.33 86.67
L T Deposits: 30.76 35.76
Current Assets: 434.56 189.87
Total Assets: 1,672.66 1,501.16
Sales, Profit & Pay Out
Sales: 723.59 728.71
Gross Profit/(Loss): 19.06 (76.49)
Operating (Loss): (24.49) (118.88)
Other Operating Income: 5.95 21.72
Financial (Costs): (62.34) (95.26)
(Depreciation): (65.65) (47.95)
(Loss) Before Taxation: (80.88) (192.42)
(Loss) After Taxation: (72.23) (148.57)
(Loss) Per Share (Rs): (14.36) (29.54)
Share Price (Rs) on 25-3-05: 18.50 -
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Financial Ratios
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Price/Earning Ratio: (-) -
Book Value Per Share: (87.77) 77.55
Price/Book Value Ratio: (-) -
Debt/Equity Ratio: 60:40 34:66
Current Ratio: 0.74 0.28
Asset Turnover Ratio: 0.43 0.49
Days Receivables: - 1
Days Inventory: 127 26
Gross Profit Margin (%): 2.63 (10.05)
Net Profit Margin (%): (9.98) (20.39)
R O A (%): (4.31) (9.89)
R O C E (%): (6.64) (18.02)
Plant Capacity & Production Sugar (Thousand Tonnes)
A) Capacity Under
Production Capacity (Sugar) Rules 1972
Capacity Based on 160 Days: 40.80 40.80
Production Based on 142/149 Days: 60.21 50.14
Capacity Utilisation (%): 147.57 122.89
B) Recovery %: 8.33 7.04
C) Support Price (Rs): 40.00 40.00
D) Cane Crushing (000 Tonnes): 722.49 709.89
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COMPANY INFORMATION: Chairman: Ghulam Muhammad A Fecto; Chief Executive: Munawar Ali Fecto; Deputy Chief Executive: Kaiser Mahmood Fecto; Company Secretary: Abdul Samad; Registered Office: 1st Floor, Panorama Centre, Raja Ghazanfar Ali Khan Road Saddar Karachi. Islamabad Office: 1st Floor Office No 14, Beverly Centre, Jinnah Avenue, Blue Area Islamabad; Zonal Office: 1st Floor, Nawa-e-Waqt House, 4 Shahrah-e-Fatima Jinnah Lahore; Mills: Darya Khan (Distt Bhakkar) Web Address: www.fecto.com.
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