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Honda
Atlas Cars (Pakistan) Limited
For the year-ending June 30, 2000
Estimated
F&J Financial Performance Ranking
1996
1997
1998
1999
2000
A
B+
B+
B+
B++
Corporate
Profile:
Honda Atlas
Cars (Pakistan) Limited (HACL) is one of the leading car assemblers in the
country and belongs to one of the most diversified local conglomerate - Atlas Group. The principal activity of HACL is the
assembly, progressive manufacture and sale of Honda vehicles and spare parts.
HACL was incorporated in November 1992 as a public limited company and commenced
commercial production in mid-1994. At present, the company is listed on Karachi
and Lahore Stock Exchanges since 1994.
HACL's head
office is located in Lahore with production site situated on the nearby Multan
Road, Lahore.
HACL's
Board of Directors is headed my Mr. Yusuf H. Shirazi with Mr. Satoshi Okamoto as
President and CEO.
The latest
shareholding pattern of HACL discloses that out of a total of 4,046
shareholders, there are six shareholders that hold more than 5 per cent shares
having a cumulative shareholding of 84.2 per cent.
M/s A. F.
Ferguson & Co., the auditors of HACL have presented an unqualified auditor
report for FY 1999/00.
At this
yearend the number of employees at HACL stood at 373 as against 348 at the last
yearend.
Plant
Capacity and Production
On a single
shift basis, HACL has a designed capacity of producing 5,000 units a year,
against which HACL has produced 4,744 units during the year under review. This
production was 20.83 per cent higher than 3,926 units produced during the last
financial year. This increase in production is commendable keeping in mind the
downfall of 16.08 per cent witnessed in the total production of car making
industry.
Balance
Sheet Highlights
The balance
sheet of HACL has grown to Rs. 1.79bn from Rs. 1.53bn last year. However, total
fixed assets at Rs. 411.75m were lower than last yearend's Rs. 462.95m despite a
net addition of Rs. 2.36m made in plant and machinery. In the current portion,
inventory mounted to Rs. 685.15m from Rs. 537.67m, however, this could not
hamper the inventory age which improved to 78 days from 87 days last year. A
soaring was witnessed in trade debts that stood at Rs. 6.44m as against last
year's Rs. 0.35m. At this yearend, a higher cash and bank balance was maintained
by HACL. The net working capital improved to Rs. 730.82m from Rs. 569.75m
whereas current ratio remained unchanged at 2.13x.
On the left
hand side, HACL's networth improved to Rs. 1.14bn from Rs. 1.03bn last year that
boosted the breakup of the company to Rs. 27.14 per share from Rs. 24.58.
Interestingly, there is no long term or short term financing on HACL's balance
sheet. This as a result, provides an immaculate liability leverage of 0.57x.
Solvency has also improved to 0.36x from 0.45x last year.
Profit
& Loss Account Highlights:
This year's
P&L account portrays somewhat depressed situation despite an increase
registered in revenues. By selling 4,812 cars during the year, HACL has
registered a net sale of Rs. 3.48bn as against Rs. 2.56bn recorded last year
when HAC sold 3,660 cars. Moreover, there was sale of spare parts amounting to
Rs. 27.29m which was absent last year.
Gross
profit, which was 10.52 per cent of the sales, stood at Rs. 368.72m. However, a
damage was witnessed on gross profit margin which was at 13.40 per cent last
year.
After
accounting for administrating and selling expenses of Rs. 107.63m, HACL achieved
an operating profit of Rs. 261.10m which was 7.45 per cent of sales.
After
providing for taxation of Rs. 290.50, a net profit of Rs. 191.29m was recorded
which was 5.46 per cent of sales. There was a deterioration in net profit and
net margin which were registered at Rs. 207.69m and 8.11 per cent respectively.
HACL's EPS also declined to Rs. 4.55 from Rs. 4.95.
Cash Flow
Statement Highlights:
HACL
managed to generate a cash flow of Rs. 363.08m from operating activity. There
was a net cash inflow of Rs. 12.39m from investing activities despite a fixed
capital expenditure of Rs. 16.60m. This inflow can primarily be attributed to
the interest received which was to the tune of Rs. 27.18m. in the financing
activities, there was a sole outflow of Rs. 104.94m which HACL paid as dividend
to its shareholders.
Share Price
and Volume:
HACL is
considered as one of the companies with medium size trading activity at the
bourses. During July 1999 to June 2000, 6.044 million shares of HACL changed
hands with its share price fluctuating between Rs. 20.00 and Rs. 10.60 per
share.
Pak
Suzuki
Motor Co. Limited
For the year-ending June 30, 2000
Estimated
F&J Financial Performance Ranking
1996
1997
1998
1999
2000
A
A
A
A
B
Corporate
Profile:
Pak Suzuki
Motor Co. Limited (PSMC) is another leading car assemblers in the country which
is a joint venture between Pakistan Automobile Corporation Limited (PACO) and
Suzuki Motor Corporation, Japan (SMC). With the said joint venture, which took
place in 1983, the net assets of Awami Autos Limited (AAL) which was then a
subsidy of PACO were taken over by PSMC in consideration for which shares in
PSMC were issued to PACO. In accordance with terms of sale agreement between
PACO and SMC, SMC increased its shareholding to 40 per cent and took over the
management in September 1992. Since then, SMC progressively increased its equity
to 72.8 per cent. In July 1996, the joint venture came to an end when PACO
disinvested its remaining shares which were acquired by SMC.
PSMC was
incorporated in August 1983 in Pakistan as a public limited company which
started commercial production in January 1984. Presently, company's shares are
listed on Karachi and Lahore Stock Exchanges.
PSMC is
engaged in assembling, progressive manufacturing and marketing of Suzuki cars,
pickups, vans and 4x4s.
PSMC's
board is headed by Mr. Yasuo Suzuki as the Chairman and Chief Executive with
Capt. (Retd.) Bashir Ahmed serving as Deputy Managing Director. PSMC's registered offices and production facilities are located in
Bin Qasim, Karachi.
As per the
latest shareholding pattern of the company, there are two out of 2,832
shareholders that hold more than 5 per cent of the shares with a cumulative
shareholding of 78.32 per cent.
M/s Sidat
Hyder Qamar & Co., the auditors of PSMC have presented a 'Clean' auditors
report for FY1999/00.
Plant
Capacity and Production
On a double
shift basis, PSMC has a designed capacity of producing 50,000 units a year,
against which it has produced 20,404 units during the year under review. This
production was 37.80 per cent lower than 32,805 units produced during the last
financial year. This decline in production and under utilization of the capacity
is attributable to lower demand during the year.
Balance
Sheet Highlights:
The balance
sheet of PSMC has shrank to Rs. 4.57bn from Rs. 5.52bn a year ago. There was an
increase in tangible fixed assets which stood at Rs. 1.35bn as against last
year's Rs. 1.28bn. during the year, company has made a net addition of Rs.
94.63m in fixed assets of which Rs. 77.50m were invested in plant, machinery and
dies. In the long term investments, company disinvested its holding of 100,000
shares in Bolan Casting Limited and acquired 1.8m shares of Suzuki Motorcycle
Pak. Limited for Rs. 28.8m.
In the
current portion of assets, the largest portion was composed of inventory and
stores which stood at Rs. 1,954.17m, however, this was relatively lower than the
same maintained at last yearend at Rs. 2,357.59m. Inventory age was on a very
high side at 104 days as against 101 days estimated last year. Cash and bank
balances maintained at the yearend were Rs. 232.54m. The net working capital
deteriorated to Rs. 442.28m from Rs. 562.38m whereas current ratio remained
stagnant at 1.16x.
The loss
for the year slightly dented the net worth of PSMC which declined to Rs.
1,760.13m from Rs. 1,786.73m a year ago. Similarly, breakup value dropped to Rs.
35.83 per share from Rs. 36.37 last year.
There were
no long term liabilities on PSMC's balance sheet. Moreover, company only
utilized short term financing of Rs. 1,291.20m which was comparatively lower
than Rs. 2,338.35m it did last year. This has improved debt leverage to 1.59x
from 2.09x last year.
Profit
& Loss Account Highlights:
The P&L
for the year turned red after providing a healthy profit for the last several
years which is clearly attributable to low demand which forced the revenues to
decline considerably. By selling 19,816 cars during the year, PSMC has
registered a net revenue of Rs. 6.89bn as against Rs. 8.91bn recorded last year
when PSMC sold 31,296 cars.
Gross
profit, which was a mere 4.50 per cent of the sales, stood at Rs. 310.25m after
accounting for a huge cost of goods sold of Rs. 6,578.90m.
Administrating
and selling expenses which stood at Rs. 234.79m, pulled down the operating
profit to Rs. 75.46m which was 1.10 per cent of sales.
After
providing for taxation of Rs. 28.52, company registered a net loss of Rs. 26.60m
as against a handsome after tax profit of Rs. 26.35m recorded last year. EPS
slid to a negative Rs. 0.54 per share as against Rs. 5.36 of last year. As a
result, PSMC opted of no dividend to the shareholders as against a 22.5 per cent
announced last year.
Share Price
and Volume:
PSMC is
also one of the companies with low trading activity at the bourses. During July
1999 to June 2000, 672,500 shares of PSMC changed hands with its share price
fluctuating between Rs. 14.05 and Rs. 7.50 per share.
A
Comparative Analysis and Industry Overview
Particulars
2000
1999
Change
Cars
Produced (all makes)
32,461
38,682
- 16.08%
Honda Cars
Produced
4,744
3,926
+ 20.83%
Suzuki Cars
Produced
20,404
32,805
- 37.80%
Cars Sold
(all makes)
31,759
37,262
- 14.77%
Honda Cars
Sold 4,812
3,660
31.48%
Suzuki Cars
Sold 19,816
31,296
- 36.68%
Market
Share (Honda)
15.15% 9.82%
5.33%
Market
Share (Suzuki)
62.40%
84.00% -
21.60%
Motorcycles
Produced (all makes)
86,959
87,504
- 0.62%
Tractors
Produced (all makes)
34,559
26,644
+ 29.71%
Buses,
Trucks & LCVs Produced
(all makes)
9,409
10,908
- 13.75%
Auto Assemblers'
Atlas
Honda Pak Suzuki
Medians
Ratio
(1999-00) (1999-00)
(1998 to 2000)
Current
Ratio (X) 2.13
1.16
1.46
Inventory
Age (Days) 78
104
56
Collection
Period (Days)
-
30
2
Asset
Turnover (X)
3.21
2.23
3.58
Debt
Leverage (X) 0.57
1.59
1.25
Solvency
Ratio (x)
0.36
0.73
0.55
Times
Interest Earned (X)
117.67
1.01
8.97
Gross
Profit Margin (%)
10.52
4.50
10.79
Net Profit
Margin (%)
5.46
Loss
4.33
Return on
Capital (%)
25.71
Loss
25.71
Return on
Investment (%) 10.71
Loss
9.75
Return on
Equity (%)
16.78
Loss
21.90
Earnings/
(Loss)
Per Share (Rs.)
4.55
(0.54)
5.36
Composite
Statistics for F&J Sector 'Automotive Assemblers'
Particulars
1996
1997
1998
1999
2000
No. of
Companies
13
13
13
13
12
Total Fixed
Assets 4,850
5,087
5,334
5,494
5,711
Total
Assets
16,059
17,535
17,336
20,532
19,086
Paid-up
Capital Ordinary
2,715
2,901
2,943
2,965
3,065
Retained
Earnings & Others 1,511 1,926
2,103
2,209
2,672
Revenues
28,242
26,424
27,887
33,748
36,375
Gross
Profit
3,205
2,787
2,608
3,284
3,580
Net Profit
1,335
846
588
794
1,033
Dividends
Ordinary
359
391
416
666
636
All figures
are in Rs. Million
