MIRA INFORM REPORT

 

 

Report Date :

28.09.2007

 

IDENTIFICATION DETAILS

 

Name :

ABBOTT LABORATORIES PAKISTAN LIMITED

 

 

Registered Office :

Opp: Radio Pakistan Transmission Centre, Hyderabad Road, Landhi, P.O. Box 7229, Karachi

 

 

Country :

Pakistan

 

 

Financials (as on) :

30.11.2006

 

 

Date of Incorporation :

1948 

 

 

Com. Reg. No.:

0000192 

 

 

Legal Form :

Limited Liability Company. Listed on the Karachi and Lahore Stock Exchanges of Pakistan.

 

 

Line of Business :

Engaged in the manufacture, import and marketing of research based pharmaceutical, nutritional, diagnostic, hospital and consumer products and in providing toll manufacturing services.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Business Name

 

ABBOTT LABORATORIES PAKISTAN LIMITED

 

 

Full Address       

 

Registered Address

Opp: Radio Pakistan Transmission Centre, Hyderabad Road, Landhi, P.O. Box 7229, Karachi, Pakistan

                       

Tel

92 (21) 5015049, 5015045 

Fax

92 (21) 5015564

Website

www.abbott.com.pk

 

 

Factory Location

 

Address

Plot No.13, Sector-20, Korangi Industrial Area, Karachi, Pakistan

Tel #

92 (21) 5046578, 5046574

Fax #

92 (21) 5044258

 

 

Short Description Of Business

 

Nature of Business        

Principally engaged in the manufacture, import and marketing of research based pharmaceutical, nutritional, diagnostic, hospital and consumer products and in providing toll manufacturing services

Year Established

1948 

Registration #

0000192 

 

 

Auditors

           

A. F. Ferguson & Co.

(Chartered Accountants)

 

 

Legal Status

 

The Company is incorporated in Pakistan as a limited liability company and is listed on the Karachi and Lahore Stock Exchanges of Pakistan.

           

 

Details of Chief Executive/Directors

 

Names

Designation

Mr. Munir A. Shaikh

 

Mr. Asif Jooma

 

Mr. Kamran Y. Mirza

 

Mr. Thomas C. Freyman

 

Mr. Imran A. Halai

 

Mr. Shamim Ahmad Khan

 

Mr. Aamer M. Malik

Chairman

 

Chief Executive

 

Director

 

Director

 

Director

 

Director

 

Director

 

 

Categories of Shareholders               

 

Categories

    Percentage (%)

Associated Companies, Undertakings and Related Parties

 

NIT & ICP

 

Directors, CEO and their Spouses

 

Executives

 

Public Sector Companies and Corporations

 

Banks, Development Finance Institutions, Non-Banking Finance Institutions, Insurance Companies, Modaraba and Mutual Funds

 

Others

 

Individuals

78.85

 

 

5.36

 

0.36

 

0.01

 

1.85

 

 

 

1.83

 

0.12

 

11.62

 

 

Associated Companies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

 

Abbott Laboratories, U.S.A.

Abbott Laboratories (Pacific) Limited.

Abbott Equity Holdings Limited

 

 

Products

 

Principally engaged in the manufacture, import and marketing of research based pharmaceutical, nutritional, diagnostic, hospital and consumer products and in providing toll manufacturing services.

 

 

Number of Employees

 

1,419

 

Capacity And Production

 

The capacity and production of the company’s plant is indeterminable as it is multi-product and involves varying processes of manufacture.

 

 

Distributors Network

 

Mainly in all major cities of Pakistan

 

 

Bankers

 

(1) ABN Amro Bank, NV.

(2) Deutsche Bank AG.

(3) MCB Bank Limited.

(4) National Bank of Pakistan.

(5) Standard Chartered Bank.

(6) The Hongkong & Shanghai Banking Corporation Limited

(7) Citibank N.A.

(8) The Bank of Tokyo-Mitsubishi UFG Ltd.

 

 

Financial Position

 

Extremely Sound

 

 

Financial Overview

 

Net sales for the year increased by 13% as compared to last year. The pharmaceutical segment, which represents almost 85% of company’s business, is beginning to get adversely affected by a lack of price increase for registered products. With inflation staying close to double digit and the rupee significantly depreciating particularly against the major european currencies, the cost pressures are beginning to hurt the profitability of company. Consequently, the gross profit as a percentage of sale, declined to 42% as compared to 44% in 2005, despite continued improvement in both the product sales mix and plant efficiencies. Sales and distribution and administration expenses increased by 17% and 50% respectively over last year with the increase driven mainly by increased promotional expenses related to consumerization of selective nutritional products and higher pension charge. Other income for the year more than doubled as better returns were achieved on investment of surplus funds. Other operating charges were contained below last year’s level, while financial cost increased slightly. The fall in gross profit percentage and a simultaneous increase in selling, distribution and administration expenses, meant that company’s profit before tax increased by 5% over last year. With the tax charge at Rs. 440 million, company’s profit after taxation increased to Rs. 1 billion as compared to the profit of Rs. 962 million in 2005.

 

           

Future Outlook

 

Almost 85% of the Company’s business related to sale of pharmaceutical products, prices of which are determined by the government. The government has not allowed any price increase in pharmaceutical products since December 2001. Since the last price increase, raw material costs have significantly increased partly due to record high oil prices and partly due to depreciating rupee particularly against the major European currencies. In addition, due to persistent high inflation rate in Pakistan, the cost of overheads including utilities has increased by almost 50% over the last five years. Construction costs have increased by an even higher percentage over this period, resulting in ever-higher capital costs. Despite such an unfavorable operating environment, Company has invested close to Rs. 1.5 billion in fixed assets over the last five years, mainly on upgrading and expanding the manufacturing facilities, and intends to make further investments over the foreseeable future. However, lack of price increase in pharmaceutical products is now beginning to affect the Company’s profitability as internal efficiency improvements alone cannot counter the impact of continuous high inflation. Company therefore strongly urges the government to arrive at a mechanism whereby price increase in registered products is allowed in line with inflationary trends in Pakistan. Further, an appropriate and consistent mechanism for determining the prices of new products also needs to be implemented by the government. It is also hoped that the government would effectively implement the recent directive of the Supreme Court to stop the unlicensed sale of drugs.

 

 

Foreign Exchange Rates

 

Currency

 

Unit

Pakistani Rupee

US Dollar

1

Rs. 60.65

UK Pound

1

  Rs. 122.60

Euro

1

Rs. 85.60

 

 

Comments

 

Subject Company is well known and directors are resourceful and experienced businessmen. Payments to creditors etc are reported as normal. The Company can be considered good for normal business dealings at usual trade terms and conditions.

 

 

 

ABBOTT LABORATORIES PAKISTAN LIMITED

 

 

 

 

 

 

 

 

 

BALANCE SHEET AS AT NOVEMBER 30, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2006

 

2005

 

 

 

 

 

2006

 

2005

 

 

 

(Rupees in '000)

 

 

 

 

 

(Rupees in '000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHARE CAPITAL AND RESERVES

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

FIXED ASSETS - property, plant and equipment

  1,437,023

 

  1,187,749

Authorised capital

 

 1,000,000

 

 1,000,000

 

LONG-TERM LOANS AND ADVANCES

        25,306

 

       28,336

 

 

 

 

 

 

 

LONG-TERM DEPOSITS

 

          3,394

 

          4,947

Issued, subscribed and paid-up capital

     979,003

 

     679,863

 

LONG-TERM PREPAYMENT

 

          5,533

 

 -

 

 

 

 

 

 

 

Total non-current assets

 

  1,471,256

 

  1,221,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reserves - capital

 

       46,097

 

     140,004

 

 

 

 

 

 

 

 

                 - revenue 

 

 3,216,786

 

 2,591,977

 

 

 

 

 

 

 

 

Total Equity

 

 4,241,886

 

 3,411,844

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores and spares

 

 

        52,498

 

       49,983

 

 

 

 

 

 

 

Stock-in-trade

 

 

  1,256,141

 

  1,217,900

NON-CURRENT LIABILITIES

 

 

 

 

Trade debts

 

 

      208,742

 

     147,297

Deferred taxation

 

       44,100

 

       21,081

 

Loans and advances - considered good

        21,812

 

       19,429

 

 

 

 

 

 

 

Trade deposits and short-term prepayments

        63,078

 

       66,238

 

 

 

 

 

 

 

Accrued profit

 

 

        11,739

 

          8,111

 

 

 

 

 

 

 

Other receivables

 

 

        45,384

 

     107,057

 

 

 

 

 

 

 

Taxation recoverable

 

 

      295,934

 

     131,233

CURRENT LIABILITIES

 

 

 

 

 

Cash and bank balances

 

  1,608,841

 

  1,160,775

Trade and other payables

     749,439

 

     696,130

 

 

 

 

 

  3,564,169

 

  2,908,023

 

 

 

     793,539

 

     717,211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTINGENCIES & COMMITMENTS

 5,035,425

 

 4,129,055

 

 

 

 

 

  5,035,425

 

  4,129,055


 

ABBOTT LABORATORIES PAKISTAN LIMITED

PROFIT & LOSS ACCOUNT

 

 

 

FOR THE YEAR ENDED NOVEMBER 30, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2006

 

2005

 

 

 

(Rupees in '000)

 

 

 

 

 

 

Sales - net

 

 

     5,887,748

 

       5,176,264

Service fee for toll manufacturing

          26,433

 

            50,820

 

 

 

     5,914,181

 

       5,227,084

Cost of goods sold and services

     3,435,553

 

       2,930,965

Gross Profit

 

     2,478,628

 

       2,296,119

 

 

 

 

 

 

Selling and distribution expenses

        877,137

 

          749,331

Administration expenses

        136,563

 

            91,184

Operating profit

 

     1,464,928

 

       1,455,604

Other operating income

        108,722

 

            49,064

Other operating charges

        130,020

 

          135,587

Operating profit

 

     1,443,630

 

       1,369,081

Finance cost

 

            3,660

 

              2,902

Profit before taxation

 

     1,439,970

 

       1,366,179

Taxation - net

 

        439,962

 

          404,007

 

 

 

     1,000,008

 

          962,172

 

 

 

 

 

 

Earnings per share - basic and diluted

10.21

 

9.83

 

 

 

 

 

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions