Synthetic & Rayon: POLYRON LIMITED - Half Year Ended December 31 2003

The company manufactures and sales polyester yarn. During the last six years the company incurred after tax losses in two years ie 1999 and 2003.
As on December 31, (the closing data of the half-year under review) the accumulated losses of the company reached Rs 350.58 million and capital deficiency increased to Rs 31.08 million.
In the last financial year the company had booked loss before extra ordinary item at Rs 50.50 million but due to extraordinary item at Rs 145.30 million the company booked profit at Rs 94.80 million. But the perception remains that the operation's core business was in loss.
Since 1998, the company has declared dividend only once in 1999. During the last financial year 2002-03, the company reduced PICIC's obligation by Rs 18.52 million and MCB's obligation's by Rs 126.78 million.
As a result of these restructuring of loans the benefits were posted as extraordinary item.
The company's plant is rated at the annual production capacity of 4,100 tons but last year the actual utilisation of the capacity was merely 20% because polyron Ltd's plant was shut from July 2002 to February 2003.
After the restart of production from March 2003, sales picked up but are still lagging behind the usual sales of the company.
During the half year under review, the company's net sales increased to Rs 127.01 million (HY 2002-03: Rs 75.87 million) showing 67.4% increase over the same period last year.
On the annualised basis the 2003-04 projected net sales figure works out to Rs 254.00 million which is substantially low.
Since 1998 to 2002, its average annual net sales figures out to Rs 466 million. So the figure of half year under review grossly fall short of desired sales figure.
The only redeeming factors are the restructuring of bank loan and interest free loan from associated undertaking which reduced the financial charges.
Nevertheless, the incurred loss despite rise in production. Hopefully, the selling price will improve and with that production will also rise to reduce overhead cost per unit.

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Performance Statistics                (Million Rupees)

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Balance Sheet                                  -As At-

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                              December 31      June 30

                                     2003         2003

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Liabilities

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Share Capital-Paid-up:             172.00       172.00

Reserves:                          147.50       147.50

Accumulated (Loss):               (350.58)    (337.58)

Shareholders Equity:               (31.08)     (18.08)

L.T Debts:                         334.11       262.58

Current Liabilities:               115.58       211.39

Fixed Assets:                      272.98       286.96

L.T Deposits:                        0.42         0.49

Current Assets:                    145.21       168.44

Total Assets:                      418.61       455.89

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Profit & Loss A/c For the

 Half Year Ended December 31         2003         2002

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Sales-Net:                         127.01        75.87

Gross (Loss):                       (9.32)     (12.45)

Financial (Charges):                (0.77)      (4.64)

Other Operating Income:              0.67         0.07

(Loss) Before Taxation:            (12.37)     (20.11)

(Loss) After Taxation:             (13.00)     (20.49)

Prior Year's Adjustment:              -         145.29

Profit/(Loss) After

 Prior Year's Adjustment:          (13.00)      124.80

Accumulated (Loss) B/F:           (337.57)    (432.37)

Earnings/(Loss) Per Share (Rs):     (0.76)        7.26

Share Price (Rs) on 19-5-2004:       9.65            -

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Financial Ratios

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Price/Earning Ratio:                   (-)           -

Book Value of Share (Rs):           (1.81)        1.05

Debt/Equity Ratio:                     (-)         (-)

Current Ratio:                       1.26         0.80

Gross Profit Margin (%):            (7.34)     (16.40)

Net Profit Margin (%):             (10.23)      164.49

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