Automobile Assemblers: MILLAT TRACTORS LIMITED - Half Year Ended December 31 2006

The company was incorporated in the province of Punjab having its registered office and factory located at Sheikhupura Road District Sheikhupura Punjab. It is engaged in the assembly and manufacture of agricultural tractors, implements and equipments.
The share of Millat Tractors Ltd are listed on Karachi, Lahore and Islamabad stock exchanges. These shares are highly priced showing very high confidence of the investors in the enterprise. On June 6, 2007, the closing price of the share was recorded at Rs 331 per share which is more than 33 times of the par value. During the last 52 weeks market value of its share between high/low remained within the range of Rs 273.10 and Rs 388 per share. During HYD06-07, the half year under review the company posted sales in terms of value at Rs 4.533 billion (SPLY: Rs 4.714 billion) showing 3.8% decrease.
It appears that lower volume sales reduced the sales revenue. During the first six months, 11,244 tractors were sold as compared to 11,883 during the same period last year (SPLY) showing shortfall of 639 units ie 5.4%. Operating profit sharply declined by 43% to Rs 217.42 million (SPLY Rs 383.84 million).
The Chairman of Millat Tractors Ltd, attributed the decline in profitability to increase in input costs due to inflation, increase in steel/copper prices exorbitant rise in pound starting value as compared to Pak rupees and marginal reduction in sales volume. Also selling prices of tractors remained frozen for the last several years.
Financial charges remained minimal but other income increased by Rs 107 million to Rs 196 million as compared to Rs 89 million in the SPLY. This did not fill the gap between the pretax profit amounts of both the periods under comparison. So pretax profit at Rs 379 million in the period showed decline by Rs 39 million from Rs 418 million in the SPLY.
But the tax provision compared to last year was lower. Hence the net profit after taxation went up at Rs 293.68 million in HYD 06-07, as compared to Rs 274.05 million in the SPLY. In this case tax provision was booked for Rs 84.67 million in the period as compared to Rs 144.42 million in the corresponding period last year. According to the half year report of the company provision in respect of taxation is estimate and this is subject to final adjustments in the annual financial statements. It was also reported that the company in endeavouring to enhance its production to reduce the outstanding booking of tractors. To achieve this target the company has improved its supply chain as well as in house manufacturing and assembly.

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Performance Statistics                          (Million Rupees)
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Balance Sheet                                            -As At-
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                                       December 31       June 30
                                              2006          2006
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                                        Un-audited       Audited
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Share Capital-Paid-up:                      187.42        156.18
Reserves & Surplus:                       2,280.84      2,174.58
Shareholders Equity:                      2,468.26      2,330.76
Unrealized Gain:                             61.30         62.58
Accumulating Compensating Absences:          23.58         23.58
Deferred Tax:                                 1.96          2.28
Deferred Revenue:                           205.90        208.40
Security Deposits:                            9.08          9.09
Current Liabilities:                      4,279.74      4,816.85
Fixed Assets Tangible:                      333.18        279.21
Intangible Assets:                           14.45          8.26
Investment Property:                        255.71        255.71
L.T. Investments:                           273.14        274.42
L.T. Loans:                                   4.79          4.46
Current Assets:                           6,168.55      6,631.48
Total Assets:                             7,049.82      7,453.54
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Profit & Loss A/c for Half Year Ended              -December 31-
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                                              2006          2005
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Sales-Net:                                4,532.78      4,713.98
Gross Profit:                               486.01        482.96
Operating Profit:                           217.42        383.84
Other Income:                               196.90         89.12
Finance (Charges):                          (4.29)        (2.42)
Profit Before Taxation:                     378.36        418.47
Profit After Taxation:                      293.68        274.05
Earnings Per Share (Rs):                     15.67             -
Share Price (Rs) on 11/06/2007:                331             -
Price/Earning Ratio:                         21.12             -
Debt/Equity Ratio:                           0:100         0:100
Current Ratio:                                1.44          1.38
Gross Profit Margin (%):                     10.72         10.25
Net Profit Margin (%):                        6.48          5.81
R.O.A. (%):                                   4.17          3.68
R.O.E. (%):                                  11.89         11.75
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