MIRA
INFORM REPORT
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Report Date : |
16.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
BESTWAY CEMENT LIMITED |
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Registered Office : |
Bestway Building, 19-A, College Road, F-7 Markaz,
Islamabad |
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Country : |
Pakistan |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
1994 |
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Com. Reg. No.: |
0031894 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
Production and Sale of Cement. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
Business Name
BESTWAY CEMENT LIMITED
Full Address
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Registered Address |
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Bestway Building, 19-A, College Road, F-7 Markaz, Islamabad, Pakistan |
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Tel |
92 (51) 2654856 - 63 (7 Lines) |
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Fax |
92 (51) 6367414 |
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Website |
Short Description Of Business
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Nature of Business |
Engaged in production and sale of cement. |
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Year Established |
1994 |
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Registration # |
0031894 |
Plant Location
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Address |
Swaj Gali Road,
Village Shadi, Hattar, Distt, Haripur, N.W.F.P. Pakistan |
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Tel # |
92 (303) 7711057 - 58 |
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Fax # |
92 (303) 7711056 |
Marketing Office
167-A, Adamjee Road,
Rawalpindi Cantt,
Rawalpindi, Pakistan
Auditors
S.Ebrahim & Co.
(Chartered Accountants)
Legal Status
Subject Company is a public limited company incorporated in Pakistan and
is listed in Karachi Stock Exchange.
Details of Directors
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Names |
Designation |
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Sir Mohammed Anwar Pervez Mr. Zameer Mohammed Choudrey Mr. Arshad Mehmood Chaudhary Mr. Muhammad lrfan A Sheikh Mr. Mazhar Rafi Mr. Arshad Hameed Mr. Ghulam Sarwar Malik |
Chairman Chief Executive Director Director Finance & CFO Director Administration & Marketing Director Coordination Director Works |
Holding Company
Bestway (Holdings) Limited of United Kingdom is the ultimate parent company of the Company.
Associates
A. Subsidiary
None
B. Associated Companies
Bestway Cash &
Carry Limited.
Bestway Northern Limited.
Products
Engaged in production and sale of cement including Ordinary Portland Cement, Sulphate Resistant Cement & Quick Setting Cement.
Number of Employees
More than 500
Plant Capacity & Production
of Clinkers
2007 2006
Metric Tons Metric
Tons
Available capacity Hattar 1,170,000 1,170,000
Chakwal 1,710,000 1,710,000
Actual production Hattar 1,143,441 1,097,334
Chakwal 1,061,053 32,673
Annual Sales Volume (Last Two
Years)
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Years |
In Pak Rupees |
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2006 2007 |
4,543,808,323/- 5,649,378,012/- |
Customers
Various local & International including Construction Companies, Buying Agencies, Distributors etc
Bankers
Habib Bank Limited,
Pakistan.
MCB Bank Limited,
Pakistan.
Allied Bank Limited,
Pakistan.
Standard Chartered
Bank, Pakistan.
Bank of Punjab,
Pakistan.
Faysal Bank Limited,
Pakistan.
Union Bank Limited,
Pakistan.
Askari Commercial
Bank Limited, Pakistan.
Bank Al-Habib
Limited, Pakistan.
(10) NIB Bank Limited, Pakistan.
(11) National Bank of Pakistan, Pakistan.
(12) United Bank
Limited, Pakistan.
(13) Bank Alfalah
Limited, Pakistan.
Exporting Countries
Mainly to Afghanistan & India
Industry Overview
During the year under review, despatches of cement by the industry increased by 32% to 24.29 million tonnes as against 18.4 million tonnes for last year. The domestic market grew by 24% while exports recorded a healthy increase of 112%. Overall capacity utilisation for the industry stood at 81% for the year under review as against 91% for last year. The decline in capacity utilisation was mainly due to additional capacity coming online during the year.
Operating Highlights
The Company recorded sales of Rs. 8,409 million compared to Rs. 6,131 million during the preceding year. Net turnover amounted to Rs. 5,649 million compared to Rs. 4,544 million in the corresponding period last year, which represents an increase of 24%, after payment of Rs. 2,453 million towards Sales Tax and Excise Duty and Rs. 307 million as rebates and discounts to customers. The increase of 24% in net turnover resulted from better selling prices achieved during the year both in the local as well as export markets. Gross Profit registered a decrease of 56% to Rs. 1,013 million from Rs. 2,294 million mainly due to low retentions and high energy costs. Finance cost increased to Rs.1,212 million for the year ended 30th June 2007 from Rs. 469 million last year. This was due to financial charges incurred on monies borrowed for the acquisition of Mustehkam Cement Limited, increased borrowing for running Chakwal Line I and the higher cost of borrowing. Profit before taxation for the year ended 30th June 2007 decreased by 97% to Rs. 56 million as compared to Rs. 1,730 million for the previous year. Profit after taxation for the year ended 30th June 2007 amounted to Rs.52 million as compared to Rs. 1,226 million for the previous year, which represents an decrease of 9,580%. Earnings per share (EPS) of the Company for the year ended 30th June 2007 on its increased paid up capital after issue of bonus shares stand at Rs.0.20 as compared to last year’s EPS of Rs.4.76.
Future Outlook
A number of green field and expansion projects are nearing completion and the year ahead will see a surge in cement production capacity in the country. Prices are witnessing a downward trend and are expected to soften further during the coming year. However, management believes that demand for cement is likely to remain robust aided by official GDP forecasts for the year 2007-08 at a respectable 7%. The continued acute shortage of housing in the country, easier availability of housing finance, government’s continued emphasis on improving and further developing the infrastructure across the country and allocation of nearly Rs.415 billion for PSDP, and a growing export market should help in mitigating to some extent the impact of excess supply and falling prices. As always, the management will be working hard to ensure further growth and provide superior return to you, the shareholders in the ensuing year.
Memberships
Federation Pakistan Chamber of Commerce & Industry.
Foreign Exchange Rates
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Currency |
Unit |
Pakistani Rupee |
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US Dollar |
1 |
Rs. 63.25 |
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UK Pound |
1 |
Rs. 123.90 |
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Euro |
1 |
Rs. 92.60 |
Comments
Subject Group enjoys excellent credibility in Pakistan as well as in abroad. Directors of the Company are reported as qualified, experienced and resourceful businessmen. Payments are usually correct and as per commitments. The Company can be considered for normal business dealings at usual trade terms and conditions.
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BESTWAY CEMENT
LIMITED |
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PROFIT AND LOSS
ACCOUNT |
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FOR THE YEAR
ENDED JUNE 30, 2007 |
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2007 |
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2006 |
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Note |
Rupees |
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Sales - net |
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23 |
5,649,378,012 |
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4,583,808,323 |
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Cost of sales |
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24 |
4,636,508,040 |
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2,250,304,518 |
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Gross profit |
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1,012,869,972 |
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2,333,503,805 |
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Administration and general expenses |
25 |
103,121,152 |
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124,952,073 |
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Distribution cost |
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26 |
38,278,894 |
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24,563,397 |
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Finance cost |
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27 |
1,211,745,924 |
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468,727,103 |
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Other income |
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28 |
(396,632,200) |
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(139,240,672) |
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Workers' profit participation fund |
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- |
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84,034,307 |
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956,513,770 |
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563,036,208 |
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Profit before
taxation |
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56,356,202 |
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1,770,467,597 |
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Taxation |
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29 |
4,817,471 |
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504,614,420 |
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61,173,673 |
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2,275,082,017 |
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Earning per
share (Basic and diluted) |
30 |
0.20 |
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4.76 |
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BESTWAY CEMENT
LIMITED |
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BALANCE SHEET AS
AT JUNE 30, 2007 |
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2007 |
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2006 |
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Note |
Rupees |
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Share capital
and reserves |
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Authorised share capital |
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300,000,000 (2006: 250,000,000) ordinary
shares |
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of Rs. 10/- each |
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3,000,000,000 |
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2,500,000,000 |
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Issued, subscribed and paid-up capital |
4 |
2,575,079,770 |
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2,340,981,610 |
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Surplus on remeasurement of available for
sale |
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investment to fair value |
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437,623,819 |
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240,343,819 |
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Unappropriated profit |
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5 |
1,851,979,758 |
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2,268,637,347 |
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Advance for issue of right shares |
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1,116,466,140 |
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- |
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5,981,149,487 |
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4,849,962,776 |
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Non-current
liabilities |
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Long term financing - secured |
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6 |
12,380,000,005 |
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9,458,832,353 |
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Liabilities against assets subject to
finance lease |
7 |
227,054,048 |
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- |
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Deferred liabilities |
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8 |
1,055,573,197 |
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1,075,913,123 |
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Long term advance |
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9 |
23,607,975 |
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33,249,240 |
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13,686,235,225 |
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10,567,994,716 |
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Current
liabilities |
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Trade and other payables |
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10 |
693,718,916 |
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653,173,501 |
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Markup payable |
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260,111,697 |
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169,907,278 |
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Short term borrowings - secured |
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11 |
756,384,619 |
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1,110,327,689 |
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Current portion of long term financing |
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1,703,832,354 |
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666,633,334 |
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3,414,047,586 |
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2,600,041,802 |
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23,081,432,298 |
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18,017,999,294 |
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2007 |
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2006 |
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Note |
Rupees |
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Non-current
assets |
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Fixed assets |
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Property, plant and equipment |
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13 |
9,792,103,067 |
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9,752,139,388 |
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Capital work in progress |
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14 |
4,383,271,686 |
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936,567,384 |
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14,175,374,753 |
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10,688,706,772 |
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Investment property |
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15 |
277,155,456 |
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277,155,456 |
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Long term investments |
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16 |
5,514,775,613 |
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4,984,929,077 |
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Long term advances and deposits |
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17 |
307,325,047 |
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102,200,847 |
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20,274,630,869 |
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16,052,992,152 |
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Current assets |
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Stores, spare part and loose tools |
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18 |
1,062,334,034 |
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795,246,779 |
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Stock in trade |
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19 |
290,830,696 |
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150,269,307 |
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Trade debts - considered goods |
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84,633,511 |
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33,190,955 |
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Available for sale investments |
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20 |
- |
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330,600,000 |
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Advances, deposits, prepayments and |
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other receivables |
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21 |
482,675,425 |
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236,138,276 |
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Bank balances |
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22 |
886,327,763 |
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419,561,825 |
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2,806,801,429 |
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1,965,007,142 |
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23,081,432,298 |
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18,017,999,294 |
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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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%)