Balochistan Glass Limited (PSX: BGL) was incorporated in Pakistan as a public limited company in 1980. The principal activity of the company is the manufacturing and sale of glass containers, glass table wares and plastic shell. BGL’s has three manufacturing facilities, one of which is located in Hub Balochistan while the other two are located in Sheikhupura, Lahore.
Pattern of Shareholding
As of June 30, 2024, BGL has a total of 261.6 million shares outstanding which are held by 3219 shareholders. MMM Holding (Private) Limited, the parent company of BGL has 84.34 percent stake in the company followed by local general public holding 12.64 percent shares of BGL. Joint stock companies account for 2.74 percent of the outstanding shares of BGL. The remaining ownership is distributed among other categories of shareholders.
Financial Performance (2019-25)
Over the period under consideration, BGL’s topline slid in 2021, 2023 and 2024. The company recorded positive bottomline only in 2021. Its margins also stood in the negative territory in all the years under consideration except for 2021. The detailed performance review of the period under consideration is given below.
In 2019, BGL recorded hefty topline growth of 135.91 percent which took its net sales to Rs.1121.78 million. This was the result of the start of pharmaceutical operations at the Hub plant. Both local and export sales of BGL more than doubled during the year.
However, 79.67 percent year-on-year spike in cost particularly utilities didn’t allow the company to cherish the tremendous sales growth. The company recorded gross loss of Rs.103.91 million in 2019, down 49.73 percent year-on-year. Administrative & selling expense also expanded by a whopping 114.27 percent in 2019, particularly on the back of freight, handling and forwarding expense incurred on local sale.
The much needed support was provided by other income which grew by a massive 533 percent in 2019 on the back of markup and liabilities from financial institutions written back during the year. The company recorded operating loss of Rs.61.27 million in 2019, 74 percent lesser than the operating loss recorded in 2018.
Finance cost magnified by 54.36 percent year-on-year in 2019 on the back of increased discount rate as well as increased short-term borrowings obtained during the year. BGL posted net loss worth Rs.135.62 million in 2019, signifying a dip of 52.25 percent year-on-year. Loss per share stood at Rs.0.52 in 2019 as against loss per share of Rs.1.64 recorded in 2018.
2020 appears to be telling the same tale as 2019 as the company couldn’t make any profit despite a sizeable 33.20 percent year-on-year growth in topline. BGL’s net sales were recorded at Rs.1494.18 million in 2020. The topline growth is mainly attributable to tableware glass division which performed exceptionally well during the year. High cost of sales kept daunting BGL’s financial performance, however, the gross loss of Rs.44.45 million recorded in 2020 was 57.22 percent lesser than gross loss recorded in 2019. Selling & Administrative expense escalated by 18.18 percent year-on-year in 2020 on account of promotional discounts and incentives provided by the company during the year.
What made BGL’s bottomline even more pitiable than last year was an enormous 4413.68 percent spike in other expense coupled with a significant 98.62 percent drop in other income. Other expense grew on the back of provision for GIDC balance. Other income dropped as huge amount of liabilities and mark-up were written back in 2018 which created a high-base effect. Consequently, operating loss grew massively by 443.93 percent in 2020 to clock in at Rs.333.28 million. To make it worse, finance cost surged by 37.69 percent year-on-year in 2020 due to high discount rate during the first three quarters of 2020 coupled with increased short-term borrowings. The net loss of BGL magnified by 242.28 percent in 2020 to clock in at Rs.464.21 million. Loss per share climbed up to Rs. 1.77 in 2020.
2021 is the only year after 2016 where BGL posted net profit. The adverse effects of COVID-19 continued to cripple the operations of the company which is evident from the topline slide of 16.19 percent year-on-year recorded in 2021. BGL’s net sales stood at Rs.1252.22 million in 2021. Both local and export sales witnessed a dip during the year owing to restricted movement of people and goods on account of global pandemic. Low sales volume was also the result of the closure of pharmaceutical operations during the year which couldn’t be offset by the expansion of tableware glass project. However, lesser sales also meant controlled cost of sales. This resulted in gross profit of Rs.117.50 million recorded in 2021 as against gross loss of Rs.44.45 million posted in the previous year. GP margin stood at 9.38 percent in 2021. Administrative and selling expense as well as other expense also behaved favorably during the year owing to lesser freight, handling and forwarding charges and absence of provision for GIDC balance respectively. Other income increased by 3879.93 percent in 2021 owing to unwinding of discount on GIDC payable and reversal of provision for default surcharge on taxation. This culminated into operating profit of Rs.121.77 million in 2021 with OP margin of 9.72 percent. Finance cost also slid by 23.51 percent during the year on the back of low discount rate as well as lower outstanding borrowings during the year. The company also received share of profit from its investment in Paidar Hong Glass (Private) limited (PHGPL). As a consequence, BGL posted net profit of Rs.25.46 million in 2021 with NP margin of 2 percent. EPS stood at Rs. 0.10 in 2021.
In 2022, BGL posted a marginal growth of 7.49 percent in its topline which clocked in at Rs. 1346.05 million. This was because the curtailment of gas supply during the year didn’t allow BGL to attain its targeted production levels during the year. The company also didn’t record any export sales during the year which also affected its topline growth.
High inflationary pressure particularly incremental gas prices as well as depreciation of Pak Rupee drove up the cost of sales by 33.66 percent and resulted in gross loss Rs.170.58 million in 2022. Operating expense also grew by 21.40 percent in 2022 on the back of inflationary pressure which drove up the payroll expense despite massive reduction in the number of employees from 268 in 2021 to 120 in 2022.
Higher freight and forwarding as well as travelling & conveyance expense due to escalated prices of POL products also pushed the operating expense up during the year. Other expense gave another blow to the company as it grew by 122.93 percent in 2022 on the back of higher provisioning for doubtful trade balances.
Other income provided the much needed support as it grew by 41.37 percent year-on-year in 2022 on the back of markup written back on settlement with bank and other associates. BGL failed to record operating profit during 2022. Operating loss stood at Rs.158.56 million in 2022.
Finance cost grew by 21 percent in 2022 on the back of high discount rate during the year coupled with higher short-term borrowings obtained during the year. The share of profit from the associate company, PHGPL also dropped by 79.66 during the year. All the downbeat factors culminated into net loss of Rs.269.44 million with loss per share of Rs.1.03 in 2022.
In 2023, BGL’e net sales drastically dropped to the tune of 86.18 percent year-on-year to clock in at Rs.186.01 million. This was on account of the closure of the company’s table glassware division since May 2022 to overcome the operational and financial vulnerabilities faced by the company.
As of June 30, 2023, BGL had an accumulated loss of around Rs.6118 million due to net losses registered by the company for many years. Cost of sales slipped by 74.96 percent year-on-year in 2023. Gross loss hiked by 13.55 percent year-on-year to clock in at Rs.193.69 million in 2023.
Administrative and selling expense slumped by 66.71 percent year-on-year in 2023 due to significantly lower payroll expense incurred during the year as the company downsized its workforce from 120 in 2022 to just 6 in 2023. Lower travelling & conveyance and freight charges also contributed in driving down the operating expense in 2023.
Considerable reduction in provisioning for doubtful trade debts trimmed down other expense by 37.26 percent in 2023. Other income also gave some breather as liabilities no longer payable were written back during the year resulting in 128.68 percent rise in other income in 2023.
Thanks to other income, BGL was able to post operating profit of Rs.5.35 million in 2023 with OP margin of 2.87 percent. However, operating profit couldn’t trickle down to produce a positive bottomline in the presence of 39.79 percent hike in finance cost on the back of high discount rate. BGL posted net loss of Rs.135.06 million in 2023, down 49.88 percent year-on-year. Loss per share also toppled to Rs.0.52 in 2023.
In 2024, BGL’s net sales eroded by 13.26 percent year-on-year to clock in at Rs.161.35 million. This was the result of a sustained halt of glass production owing to the management’s decision to cope up with exorbitant production costs by undertaking measures to improve operational efficiency. Inconsistent gas supply, elevated energy cost and hike in the prices of raw materials made it difficult for the company to continue its operations. As of June 30, 2024, BGL’s accumulated loss stood at Rs.6615.27 million versus accumulated loss of Rs.6117.596 million recorded at the end of last financial year. Majority of the company’s long-term and short-term loans were obtained for its holding company, associated companies, directors and ex-directors. The company had written back its accrued mark-up and liabilities in the previous year as a result of settlement with banks and waiver received from associated parties. Despite topline slide, BGL’s cost of sales escalated by 18 percent in 2024. This was the result of higher utility charges and inventory purchased during the year. In 2024, BGL signed a supply agreement with Tariq Glass Industries Limited (TGL), an associated company, whereby the latter will facilitate the procurement of essential raw materials, machinery, stores & spares as well as refractory components under the arm’s length pricing principle which was in accordance with Section 208 of the Companies Act, 2017. This step was taken for the rehabilitation and optimization of BGL’s operating lines. TGL and Gharibwal Cement Limited (GCL), the associated companies, also provided corporate guarantees of Rs.3371.536 million on behalf of BGL in favor of banking companies for obtaining financial facilities. During the year, BGL recorded gross loss of Rs.286.68 million, up 48 percent year-on-year. Operating expense dropped by 4.36 percent in 2024 due to lower payroll expense as well travelling & conveyance charges incurred during the year. To kick start its halted operations, BGL made human resource induction. Its workforce stood at 162 employees in 2024 versus 6 employees in 2023. Other expense grew by 9.33 percent in 2024 due to allowance booked for doubtful balances. Conversely, the company made a petite other income of Rs.0.03 million in 2024, down 99.9 percent year-on-year as unlike last year, there were no liabilities written back during the year. BGL posted operating loss of Rs.321.57 million in 2024. Finance cost surged by 29.23 percent in 2024 due to mark-up incurred on additional loans acquired from related parties as well as bank & guarantee commission charges incurred during the year. The company incurred net loss of Rs.508.72 million in 2024, up 276.68 percent year-on-year. Loss per share stood at Rs.1.94 in 2024.
In 2025, BGL’s topline posted a staggering year-on-year growth of 344.91 percent to clock in at Rs.717.83 million. Out of the three glass production plants owned by the company, two have already completed their useful campaign life. The third plant became operational during the year, however, suffered from irregular shutdowns due to technical issues. The company primarily relied on its inventory during the year instead of fresh production. Cost of sales surged by 163.74 percent in 2025 due to higher fixed cost per unit on account of idle capacity. This translated into gross loss of Rs.463.79 million in 2025, up 61.78 percent year-on-year. Administrative & selling expense mounted by 160.17 percent in 2025 due to higher payroll expense, travelling & conveyance charges as well as freight charges incurred during the year. Other expense dipped by 97.70 percent in 2025 as apparently the company didn’t record any allowance for doubtful debt. BGL recorded other income of Rs.68.64 million in 2025, as against other income of Rs.0.03 million recorded in 2024. This was the result of gain recorded on the disposal of fixed assets and stock & stores. Operating loss surged by 41.92 percent to clock in at Rs.456.37 million in 2025. Finance cost escalated by 34.24 percent in 2025 despite monetary easing. This was because of increased short-term and long-term borrowings obtained from holding company (M/s MMM Holding Private Limited) and associated company (Gharibwal Cement Limited) during the year. In 2025, the company undertook a major financial overhaul and allotted 376,912,057 ordinary shares to M/s MMM Holding (Private) Limited. This was against the outstanding loan payable by BGL. M/s MMM Holding (Private) Limited now own 93.5858 percent of the total paid-up capital of BGL. BGL’s net loss multiplied by 40.25 percent to clock in at Rs.713.46 million in 2025. Loss per share stood at Rs.1.85 in 2025.
Future Outlook
In 2023, TGL signed a share purchase agreement to acquire 50 percent shares of MMM Holdings (Private) Limited. It is expected that the involvement and supervision of the experts of TGL will help BGL overcome its operational challenges and will also provide strong market presence to the company.
The two companies have also signed contract purchase agreement whereby BGL will produce certain glassware products under TGL’s brand name to meet the specific customer requirements. Since TGL is a prominent player in the glass industry, its involvement will result in better management control which is likely to produce a positive impact on the future performance of BGL.
TGL and BGL have also signed an agreement whereby the former will provide access to short-term financing of up to Rs.1 billion and corporate guarantee of up to Rs. 3 billion. For the settlement of existing loans, BGL also allotted 376,912,057 ordinary shares to M/s MMM Holding (Private) Limited against its outstanding loan.
All these steps show that the company is aggressively working to optimize its operations and attain financial stability with perseverance.
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