The year under review witnessed highest ever sales in the company's history but margins remained under pressure. Even then it registered robust growth in gross profit. Increasingly rapid growth in sales and higher production were significant contributors to operating profits.
The financial backbone of the company remained robust as can be observed from the financial ratios appended with this write-up. The company's pre-tax profit amounting to Rs 53.27 million (2004: Rs 42.04 million) was 26.7% higher. But after tax profit was much lower at Rs 27.61 million compared to the last year's figure of Rs 58.16 million. It was because, last year profit from unusual item amounting to Rs 21.47 million was added. This unusual item was favourable reversal of liability.
As regards future prospects the directors of the company think that the future outlook for PET packaging remains very positive with growth in CSD and other new sectors. The company is tracking the potentials by pursuing expansion.
Ecopack Limited is principally engaged in the manufacture and sale of Poly Ethylene Terepthalat, (PET) bottles. Its two manufacturing facilities are located in the province of Sindh at SITE Karachi and in the province of NWFP at Industrial Estate Hattar district Haripur.
The company was incorporated in the province of Sindh on August 25, 1991 as a private limited company and subsequently converted into public limited on April 29, 1992. The address of its registered office as well as corporate office is F-248 near Fire Brigade, SITE Karachi.
The URL of its website is www.ecopack.com.pk.
The company was listed on the Karachi Stock Exchange in 1994. The market value of the share during the last 52 weeks increased from Rs 32.50 per share to Rs 70.60 registering 117.2 percent increase. On May 15, 2006, the closing price of the share was quoted at Rs 36.50 per share which is nearly four times of the par value.
With adjustment of 50% bonus stock dividend and 100% right share issue the company's paid up capital increased from Rs 57.09 million in June 2004 to Rs 142.71 million in June 2005. But on the basis of the recent market value of the share, the market capitalisation shot up to Rs 513.76 million. After inclusion of reserves and surplus, the shareholders equity works out to Rs 212.43 million.
As regards ownership of the equity the company directors, their spouse and minor children's shareholdings add up to 7.45 million shares out of company's total shares of 14.27 million and this holding works out 52.16% of the company's stock. Its 2012 individual shareholders own 16.53% and the Bank of Khyber owns 5.94% of the stock.
Based on the shareholders equity the break up value of the share works out to Rs 14.89 per share and this carries 48.9% premium over the par value.
According to the six years' statistics published with the company's annual report 2005, the company declared dividends in Three years out of six years in the years 2000, 2004 and 2005. The company appears to be regular in the dividend announcements since the last two years.
During the FY 2004-05, the company posted sales in terms of value at Rs 751.19 million registering impressive growth of 70% as compared to the figure amounting to Rs 442.92 million. The directors of the company rejoiced that it is the ever highest growth in sales. The Hattar location provided 93.9% total sales and grew at 75.6 percent compared to last year's showing more accelerated growth compared to the company's sales. Remaining sales were contributed by Karachi location.
The directors sales analysis shows that Coke and Pepsi remained the biggest users of PET bottles and comprised the largest contributors to growth. The demand for PET packaging from other carbonated soft drinks (CSD) is gaining in significance along with non-CSD drinks.
They further reasoned that increasingly rapid sales growth and economies of scale were significant contributors to the healthy operating results.
Capacity utilisation, even after the significant expansion in capacity, during the year (under review), almost reached pre-expansion levels in this year.
Hattar plant achieved 73.6 percent utilisation this year versus 75.4 percent last year while at the Karachi plant there was 69.9% utilisation this year versus 72.2% last year.
While Hattar plant remained main contributor to sales, the Karachi plant sales grew by 47 percent, which has meant that it is finally profitable at the operating level.
Although Gross Profit increased at 40% but pressure on margins continued.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital Paid-up 142.71 57.09
Reserves & Surplus 69.72 69.86
Shareholder Equity 21,43 126.95
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Surplus on Revaluation
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Of fixed Assets 124.96 129.18
L.T. Debts 269.38 242.53
Deferred Liabilities 101.02 80.13
Current Liabilities 329.21 179.15
Fixed Assets 700.17 571.08
L.T. Deposits 7.44 1.87
Current Assets 329.39 184.99
Toatal Assets 1,037.00 757.94
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Sales, Profit & Pay Out
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Net Sales 751.19 442.92
Gross Profit 155.19 110.53
Operating Profit 90.69 65.89
Other Income 3.47 3.05
Finance (Charges) (32.60) (16.50)
(Depreciation) (36.65) (24.42)
Profit Before Taxation 53.27 42.04
Unusual Item - 21.47
Profit after Taxation 27.61 58.16
Earnings per Share (Rs) 2.15 5.11
Dividend Bonus Stock (%) 15.00 50.00
Dividend Cash (%) - 10.00
Share Price (Rs) On 15.05.2006 36.00
Financial Ratios
Price/Earning Ratio: 16.74 -
Book Value per Share: 14.89 22.24
Price/Book Value Ratio 2.42 -
Debt/Equity Ratio: 44:56 49:51
Current Ratio: 1.00 1.03
Asset Turnover Ratio: 0.72 0.58
Days Receivables: 50 50
Days Inventory: 104 83
Cross Profit margin(%): 20.66 24.95
Net profit Margin (%): 3.68 13.13
R.O.A.: 2.66 7.67
R.O.C.E. (%): 3.90 10.06
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Plant Capacity & Actual Production (Million bottles)
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Hattar Plant
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100% Plant Capacity (Based on
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250 days (3 Shifts): 110.70 62.08
Actual Production: 16.56 10.83
Capacity Utilisation(%): 69.87 72.18
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COMPANY INFORMATION: Chairman: Hussain Jamil; Chief Executive Officer: Ahsan Jamil; Chief Financial Officer: H.R. Siddiqui FCMA; Company Secretary: Muhammad Hussain Khan FCIS; Registered Office & Corporate Office: F-248, Near Fire Brigade, S.I.T.E., Karachi; Web Address: www.ecopack.com.pk Head Office: Room No 206, 2nd Floor, The Plaza Kehkashan, Clifton, Karachi; Factories: Industrial Estae Hattar District Haripur, NWFP; F.248, Near Fire Brigade S.I.T.E., Karachi.
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