KARACHI, Jan 22: On Wednesday, Abbott Laboratories (Pakistan) Limited announced the financial figures for the year ended November 30, 2002, which possibly are the first full year numbers after the company’s merger with Knoll Pharmaceutical Limited.

The company posted pretax profit amounting to Rs688.5 million, which represented growth of 52.5 per cent over pretax profit at Rs451.2 million for 2001. After tax profit improved 26.6 per cent to Rs439.3 million, from Rs368.4 million. The board of directors also recommended final cash dividend at 30 per cent, which together with the interim already paid at 15 per cent, would make an aggregate cash payout of 45 per cent for the year. Directors have further proposed to distribute bonus shares at 10 per cent (one-for-10). The directors had appropriated Rs200 million from the 2002 profit and Rs161 million from the previous year’s profit to the general reserves, while distributing about all of the remaining earnings to the shareholders in dividends.

Annual general meeting (AGM) of the company has been called on Monday, March 24, which would approve the accounts and dividend. The final cash dividend and bonus shares, if approved by the shareholders, would be paid to shareholders whose names appear in the Register of Members on Friday, March 14, 2003.

At the stock market, the full year results for the year ended November 30, 2002 and the final payout were greeted positively, with the Abbott stock closing at Rs85.05, from the opening value of Rs83 with trading seen in 4,300 shares. On the earning per share at Rs10.23, the share in Abbott trades at the price-to-earnings multiple of 8.3x.

Shares of all multinational pharmaceutical firms are illiquid and a day’s turnover of 4,300 could be considered significant considering that around 2 per cent (0.90 million) of the total outstanding shares (43 million) in the company were traded during January-December 2002. Insignificant floating stock is one of the reason, by the way, that stock brokerage houses in Pakistan do not generally follow the pharmaceutical sector.

Net sales including ‘other service charges’ for the year ended November 30, 2002 amounted to Rs4,054 million, which represented 15 per cent growth over net sales valued at Rs3,523 million the previous year.

Though of little significance now, it would, nonetheless have been helpful to investors, if the company had also provided the financials of the two companies separately as well — alongside the merged numbers — for comparison purposes.

It was early last year that Abbott and Knoll had decided to merge the two businesses in the country. According to the ‘Scheme of Arrangement’ the whole of the undertaking of Knoll Pharmaceutical has been transferred to Abbott; the shareholders in Knoll having been allotted 8 shares in Abbott for every 10 shares held in Knoll and the latter company wound up without dissolution. The merger of Knoll with Abbott in Pakistan followed the December 2000 agreement by Abbott Laboratories Inc, USA with BASF to purchase BASF’s pharmaceutical division worldwide. Since in Pakistan, BASF’s pharmaceutical Division operated as Knoll Pharmaceutical, the merger of Knoll with Abbott was the natural outcome.

Gross profit for the year under review increased 28.3 per cent to Rs1,462.0 million, from Rs1,155.4 million and the gross margin improved to 36.5 per cent, from 32.8 per cent. Operating profit increased 54.8 per cent to Rs726.2 million, from Rs469.3 million and the operating margin improved to 18.1 per cent, from 13.4 per cent.

Financial charges showed sharp drop of 53 per cent to Rs11.3 million for the year under review, from Rs24.2 million the earlier year, which could be due to the declining interest rates or lower debts or both. The directors report would have to be awaited to confirm those assumptions. The report would also convey to the shareholders the operational and marketing conditions during the year under review, while it would possibly be at the AGM on Monday, March 24 that directors would be able to give projections for the year 2003. The company has notified that share transfer books would be closed from March 17 to March 23 (both days inclusive).