Tri-Pack Films Limited (PSX: TRIPF) was established as a Public limited company in 1993. The company is a joint venture between Mitsubishi Corporation of Japan and Packages Limited of Pakistan. The company is engaged in the manufacturing and sale of Biaxially Orientated Polypropylene (BOPP) films and Cast Polypropylene (CPP) films in Pakistan.
Pattern of Shareholding
As of December 31, 2024, TRIPF has an outstanding share capital of 38.8 million shares which are held by 1539 shareholders. Associated companies, undertakings and related parties hold 79.58 percent of TRIPF’s shares. Within this category, Packages Limited leads with 26.87 million (or 69.25 percent) shares.
Local general public forms the next biggest category of shareholders accounting for 13.90 percent of TRIPF’s shares. Directors, CEO, their spouse and minor children own 2.12 percent of the company’s shares followed by Insurance companies holding 1.76 percent shares. The remaining shares are held by other categories of shareholders.
Financial Performance (2019-2024)
TRIPF’s topline has posted growth over the period under consideration. Conversely, its bottomline slid thrice during the period i.e. in 2019, 2022 and 2024 with net loss in 2019 and 2024.
TRIPF’s margins which slightly ticked down in 2019 rebounded for the subsequent two years. In 2022, margins slightly dipped which were almost maintained in 2023. This was followed by a plunge in margins in 2024. The detailed performance review of the period under consideration is given below.
In 2019, TRIPF’s topline registered year-on-year growth of 11 percent to clock in at Rs. 14,683.27 million. This was the effect of improved prices, better sales mix, increased export volumes and new products commercialized during the year. The company sold 48,198 M tons of products, down 1 percent year-on-year in 2019. While export sales multiplied by 462 percent to clock in at 4050 M tons, local sales took 8 percent slide due to general slowdown of economy in 2019.
High cost of sales due to Pak Rupee depreciation, high inflation, soaring international commodity prices and elevated energy sector tariff slightly reduced the company’s GP margin from 10.41 percent in 2018 to 10.15 percent in 2019. Gross profit increased by 8.26 percent in 2019.
TRIPF’s operating expense grew by 14.76 percent year-on-year in 2019 primarily due to higher fuel rates resulting in towering outward freight charges. Other income increased by 75.76 percent year-on-year in 2019 due to higher scrap sales and liabilities written back during the year. Other expense slumped by 94.47 percent year-on-year in 2019 due to no profit related provisioning made during the year.
As a consequence, operating profit grew by 10 percent year-on-year in 2019; however, OP margin slightly ticked down from 5.50 percent in 2018 to 5.45 percent in 2019. Finance cost escalated by 61.47 percent year-on-year in 2019 due to higher discount rate as well as exchange loss.
Higher finance cost coupled with increased taxation due to minimum tax on the import of raw plastic materials resulted in net loss of Rs.309.81 million in 2019 as against net profit of Rs.157.36 million in 2018. TRIPF posted loss per share of Rs.8 in 2019 versus EPS of Rs.4.1 in 2018.
During 2020, COVID-19 affected all the sectors of the economy – locally as well as globally. Yet, TRIPF was able to achieve a sales volume of 47,972 metric tons, down by a paltry 0.5 percent year-on-year. Local sales volume slightly improved by 1 percent in 2020, however, export sales plunged by 16 percent year-on-year due to restrictions on the movement of goods and people in many export destinations (see the graph of Sales volume).
Topline inched up by 2.77 percent to clock in at Rs.15,089.80 million in 2020. Gross profit multiplied by 63.83 percent year-on-year in 2020 with GP margin clocking in at 16.18 percent owing to operational effectiveness, better export margins and reorganizing of product portfolio.
During 2020, Admin and distribution cost expanded in line with high fuel cost and certain one-off expenses such as provision for bad debts and legal expenditures. Other income increased by 65 percent year-on-year in 2020 due to onetime gain on re-measurement of GIDC in accordance with the reporting standards.
Other charges grew exorbitantly from Rs.1 million to Rs.135.33 million in 2020 owing to statutory charges and loss on trade receivables. Operating profit strengthened by 97.72 percent year-on-year in 2020 with OP margin climbing up to 10.50 percent. The company was able to reduce its finance cost by only 1.28 percent year-on-year despite reduction in the discount rate because of huge exchange loss during the year.
Besides low discount rate, the company has reduced its debt-to-equity ratio from 60:40 in 2019 to 54:46 in 2020. TRIPF was able to post net profit of Rs.614.09 million in 2020 with NP margin of 4.07 percent. EPS stood at Rs.15.8 in 2020.
2021 touted an impressive topline growth of 26.27 percent year-on-year. Its net sales clocked in at Rs.19,054.46 million. This was despite 2 percent lower sales volume. In 2021, while many economies were showing signs of recovery post COVID-19, the company faced supplychain disruptions on account of shipping line issues and container shortages which affected the timely supply of raw materials. Local sales volume plunged to 42,810 metric tons (down 4 percent year-on-year) while export sales showed a recovery of 17 percent year-on-year to clock in at 3985 metric tons.
The growth in topline and GP margin of 16.83 percent attained in 2021 was the result of higher prices and better margins on export sales. Operating expense grew by 8.25 percent year-on-year in 2021 on account of inflation. Other expenses and other income dropped due to one-time bookings recorded in the last year. Operating profit strengthened by 41.64 percent in 2021 with OP margin climbing up to 11.76 percent.
Finance cost increased by 2.14 percent in 2021 despite discount rate cuts owing to exchange loss which grew by 12 percent year-on-year coupled with loss on re-measurement of provision for GIDC.
Besides, the company increased its debt-to-equity ratio to 65:35 on account of greater working capital needs and capital investment in new BOPP line project. TRIPF’s net profit grew by 69.66 percent year-on-year in 2021 to clock in at Rs.1041.86 million with NP margin of 5.47 percent and EPS of Rs.26.85 – the highest level since 2017.
In 2022, the company was able to maintain its topline growth trajectory. In fact, in 2022, the topline growth of 26.59 percent year-on-year, was the highest growth ever achieved by TRIPF.
The company’s net sales clocked in at Rs.24,120.28 million. However, this couldn’t trickle down into a healthy bottomline growth. High sales growth was the result of 41 percent higher export sales volume as well as 1 percent higher local sales volume attained by the company during the year coupled with high prices.
Overall, sales volume went up by 4 percent year-on-year in 2022 (see the graph of sales volume). Due to ongoing energy crisis in China, the company tapped new markets for specialized films which were not available before, hence providing impetus to its export sales.
In 2022, SSGC switched the company’s gas supply to RLNG which is 3 times as much expensive as normal gas. This increased the cost of sales of TRIPF resulting in a lower GP margin of 15.78 percent in 2022. 30.28 percent higher administrative and sales expenses came on the back of higher outward freight charges owing to improved export sales with inflationary pressure and elevated fuel prices also playing their due role. Other income surged by 48.64 percent year-on-year in 2022 primarily due to higher sale of scrap materials.
However, improved other income was absorbed by 45.11 percent increased other expense on the back of loss allowance booked on trade receivable in 2022 versus reversals in the previous year. Operating profit grew by 13.91 percent year-on-year in 2022, however, OP margin slipped to 10.59 percent.
Finance cost escalated by 41.80 percent year-on-year on the back on multiple hikes in the discount rate coupled with company’s highly leveraged capital structure. This coupled with the imposition of super tax squeezed the bottomline by 17.12 percent year-on-year in 2022 to clock in at Rs.863.51 million with NP margin dropping to 3.6 percent and EPS clocking in at Rs.22.26.
In 2023, TRIPF’s topline attained a paltry 3.31 percent year-on-year rise to clock in at Rs.24,919.17 million. During the year, local sales volume dipped by 15 percent while export sales volume surged by 17 percent. Overall sales volume tapered off by 11 percent in 2024 (see the graph of sales volume). Stability of gross margin despite hiking cost of sales validates upward price revision and higher margin on export sales due to Pak Rupee depreciation. Lower local off-take was due to import restrictions and muted economic activity.
Operating expenses mounted by 20.24 percent year-on-year in 2023 on the back of inflation and exorbitant fuel prices. Other income grew by 50.15 percent year-on-year in 2023 due to insurance claim received during the year as fire incident occurred at the company’s film manufacturing facility located at Port Qasim. Other expense slid by 6.27 percent in 2023 as TRIPF recorded loss allowance on trade receivables in 2022 which were reversed in 2023.
All these factors culminated into 2.53 percent bigger operating profit posted by TRIPF in 2023 with OP margin clocking in at 10.51 percent slightly lower than the OP margin of 10.59 percent recorded by the company in 2022. Finance cost dropped by 22.38 percent in 2023 due to better working capital management. Net profit multiplied by 13.39 percent year-on-year in 2023 to clock in at Rs.979.118 million with EPS of Rs.25.24 and NP margin of 3.93 percent.
In 2024, TRIPF’s net sales posted year-on-year growth of 18 percent to clock in at Rs.29,413 million. Local sales volume grew by 16 percent while export sales volume grew by 57 percent. Overall, the company recorded 23 percent higher sales volume in 2024. Higher sales were supported by lower international prices.
Lower margin on export sales due to global recession coupled with higher gas and fuel prices resulted in 5.77 percent downtick recorded in gross profit in 2024. GP margin also fell to 12.82 percent in 2024. Operating expense escalated by 17.33 percent in 2024 due to inflationary pressure and elevated fuel prices.
Other income improved by 12.44 percent in 2024 due to higher sale of scrap, income on bank deposits and government grant. The company didn’t book any provisioning for WWF and WPPF in 2024; hence no other expense was recorded. TRIPF booked allowance on ECL worth Rs.35.69 million in 2024.
Operating profit nosedived by 14.83 percent in 2024 with OP margin shrinking to 7.58 percent. Finance cost surged by 177 percent in 2024 due to higher discount rate as the company obtained short-term loan to meet working capital requirement and long-term loan to finance the establishment of BOPP line 5. TRIPF posted net loss of Rs.431.446 million in 2024 with loss per share of Rs.11.12.
Recent Performance (1QCY25)
During the first quarter of 2025, TRIPF recorded 11.27 percent year-on-year growth in its topline which clocked in at Rs.7,813.92 million. This was driven by higher volume in both local and export markets. Increased dispatches coupled with increase in prices and efficiency achieved from new BOPP line 5 resulted in 29 percent stronger gross profit recorded in 1QCY25 with GP margin clocking in at 13.54 percent versus GP margin of 11.67 percent recorded in 1QCY24.
Operating expense surged by 10.88 percent in 1QCY25 due to higher payroll expense and freight charges. Other income strengthened by 93.24 percent in 1QCY25 seemingly due to higher scrap sales and government grant. Rs. 9.90 million was booked as allowance for ECL during the period compared to Rs.0.33 million booked in 1QCY24. Operating profit grew by 56 percent in 1QCY25 with OP margin clocking in at 7.87 percent versus OP margin of 5.62 percent recorded in 1QCY24.
Finance cost surged by 113.77 percent in 1QCY25 despite lower discount rate. This was due to the debt obtained for new BOPP Line 5. However, by the end of the period, the company’s outstanding debt reduced due to better cash flow position. TRIPF posted net loss of Rs.20.87 million in 1QCY25 with loss per share of Rs.0.54. This was against the net loss of Rs.12.04 million and loss per share of Rs.0.31 posted in 1QCY24.
Future Outlook
Export sales of the company are expected to grow further on the back of newly identified export destinations. The improvement in macroeconomic indicators will also fuel the growth of local sales.
However, high cost of production on the back of expensive RNLG will continue to take its toll on the margins. Owing to stability in the value of local currency, export margins will further shrink. TRIPF has a geared capital structure; however, with monetary easing in place, finance cost will give some respite.
Copyright Business Recorder, 2025