20000215

Brief recordings

BY SCANNER

Engineering

Bolan Castings Limited

Year Ended June 30, 1999

Overview

The company's operating and financial results are the highest in its history. Even prior to nationalisation this was a viable and profitable enterprise. The paid-up capital of the company has not changed since 1990. But the company has built-up hefty reserves. So break-up value of the share has gone up to Rs 15.07 per 10 rupee share. The long term debt to equity ratio at 42:58 and current ratio at 1.42 depict robust profile of its financial health. The unit has attained 147% capacity utilisation and has obtained ISO 9002. Sales at Rs 406 million, gross profit at Rs 87.52 million, operating profit at Rs 74.03 million improved by 97%, 99.8% and 155.5% respectively over the preceding year's. Net profit at Rs 33.76 million produced corresponding EPS at Rs 6.11. The share in the company is trading at Rs 35.50 per 10 rupee share. The cash dividend payout improved to 25% from 15% in the previous year.

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The company was incorporated on 15th July, 1982 as a public limited company by Pakistan Automobile Corporation Ltd. (PACO) (a public sector organisation) under the administrative control of the Ministry of Production, Government of Pakistan.

The company was privatised and handed over to the new management (in private sector), under a joint collaboration of Millat Tractors Ltd. and the Employees of Bolan Castings Limited on 13th June 1993.

The share in the company was listed at Karachi Stock Exchange in 1985. At present the share in the company is trading at Rs 35.50 at substantial premium over its par value of Rs 10. The 6-year highest price of its share was quoted at Rs 41 in 1994 and the lowest price was recorded at Rs 3 in 1998.

Since 1994 the company could declare dividend only in 1998 and 1999. During the year under review, (in 1998-99) the company announced dividend at 25% as against 15% in the previous financial year 1997-98.

The main business activity of Bolan Castings Limited is to undertake castings of tractors and automotive parts. Its plant is located in the province of Balochistan at Hub, adjacent to Bela Engineers Ltd. and Balochistan Wheels Ltd. The plant is located at about 40 kilometres from Karachi (Sindh) on the main RCD Highway.

According to the notes annexed to the accounts under review, the annual casting capacity on double shift basis is 5,700 metric tonnes. During the year under review, the company sharply increased the utilisation of its installed production capacity to 147% from 70% in the preceding financial year 1997-98.

The plant was commissioned in June 1986, with the assistance of Foundry Management & Design Company (FMD) UK.

The production facilities include: a) Duplex melting consisting of twin cold blast cupolas and coreless induction furnaces

b) High pressure moulding line

c) New sand green, sand preconditioning plants

d) Resin coating plant continuous mixer, shell core machines, silicate/Co2 core machines

e) Shot blasting, felting, grinding, heat treatment and painting

f) complete inspection, testing and quality control laboratory equipments.

The plant is first of its kind of Pakistan to have obtained ISO 9002 quality management certificate in March 1999. With this the access for BCL products in export market shall no be more easy.

The units product Ñ mix for tractor industry (for two brands of tractors i.e. MF Tractors and Fiat Tractors) include. Cylinder block, cylinder head, transmission case, centre housing, timing gears, bearing caps, planetary career, differential cases, axle housings, hydraulic lift cover, box hydraulic, link rocker, sleeve, fork cluch release, axle casing, front axle support etc.

For the automotive industry the product range includes parts for Suzuki car/pick-up, Mazda truck, Nissan truck/buses, Hino truck/buses, Bedford trucks. Parts for automotive industry include brake drums, hubs, spring pads and brackets, generator brackets, exhaust manifold, hinges case thermostat, bracket alternator, fan pulley, shackles, etc.

The company also produces parts of engineering industry such as cylinder heads, pump heads etc.

The financial and operating results of the company has significantly improved. While the capacity utilisation increased. Sales in terms of value registered commendable growth at 97% to Rs 406 million (1997-98: Rs 206 million): Gross profit at Rs 87.5 million (1997-98: Rs 43.8 million) and operating profit at Rs 74.03 million (1997-98: Rs 28.98 million) over shot by 99.8% and 155.5% respectively over the preceding year's figure.

But last year there was extraordinary income item (receipt of price revision claim relating to prior year) at Rs 21.15 million. Therefore, this year's pre-tax profit registered lesser growth at 54.4%, if the operating profit growth is kept in the background.

Net profit at Rs 33.76 million increased by 319%.

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Performance Statistics (Million Rupees)

June 30 1999 1998

Capital & LiabilitiesÉÉÉ

Paid-up Capital: 55.25 55.25

General Reserves: 28.00 8.00

Accumulated Profit: 0.01 0.06

Shareholders' Equity: 83.26 63.31

L.T. Debts: 60.19 83.97

Other Non Current Liabilities: 3.08 2.32

Current Liabilities: 131.73 78.23

AssetsÉÉÉ

Fixed Assets Tangible: 88.81 96.43

L.T. Loans & Advances: 0.53 2.00

L.T. Deposits: 1.32 1.13

Current Assets: 187.60 128.27

Total Assets: 278.26 227.83

Sales, Profit & PayoutÉÉÉ

Sales Ñ Net: 406.02 206.04

Gross Profit: 87.52 43.81

Operating Profit: 74.03 28.98

Other Income: 3.50 2.29

Depreciation: 13.59 13.74

Financial Charges: 20.00 15.12

Receipt Price R/C P/Y: Ñ 21.15

Profit Before Taxation: 50.52 32.71

Profit After Taxation: 33.76 8.06

Dividend Cash 25% (1998: 15%): 13.81 8.29

Financial RatiosÉÉÉ

XD-Share Price (Rs) 9/2/2000: 35.50 Ñ

Book Value Per Share (Rs): 15.07 11.46

Price/Book Value Ratio: 2.36 Ñ

Debt/Equity Ratio: 42:58 57:43

Current Ratio: 1.42 1.64

Asset Turnover Ratio: 1.46 0.90

Gross Profit Margin (%): 21.56 21.26

Operating Margin (%): 18.23 14.07

Net Profit Margin (%): 8.31 3.91

EPS (Rs): 6.11 1.46

Price/Earning Ratio: 5.82 Ñ

R.O.E. (%): 40.55 12.73

R.O.A. (%): 12.13 3.54

R.O.C.E. (%): 23.04 5.38

Capacity Castings (Metric Tonnes)ÉÉÉ

Double Shift Per AnnumÉÉÉ

Installed Capacity: 5,700 5,700

Production: 8,353 3,977

Capacity Utilisaton (%): 147 70

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Company information: Chairman: Sikandar M. Khan. Chief Executive: Latif Khalid Hashmi. Company Secretary: M. Mushtaq Akhtar. Registered Office: Adjacent to Bela Engineering Ltd. Village Baroot, Sub-Tehsil Hub, District Lasbela, Balochistan.