KARACHI, Feb 27: ICI Pakistan Limited on Thursday announced after-tax profit at Rs1.85 billion for the financial year ended December 31, 2002. The Board also declared cash dividend at Rs2.25 per share.

The company’s net earnings stood out higher by more than Rs500 million over most analysts’ expectations while the dividend was about mid-way of the analysts’ forecasts between Rs2 and Rs2.50 per share.

The ICI stock lost Rs2.15 to close at Rs42.85 on Thursday, from the previous close at Rs45, though that could have more to do with the general market slump, since the financial results came up after the trading hours.

Profit after-tax for the latest year was significantly higher than taxed profit of Rs566.6 million earned by the company the previous year. The results included a tax write back of Rs1.19 billion, to recognize deferred tax on account of tax losses retained by the company at the time of demerger with Pakistan PTA. In a note to the accounts, the company explained that it was to comply with legal requirements, that the company had adopted International Accounting Standard on Income Taxes (IAS- 12).

“The resulting credit (of Rs1.14 billion) is not cash generative and is based on the directors’ view of future utilization of available tax losses,” the company said, adding that an additional deferred tax credit amounting to Rs50.3 million, on surplus on revaluation of fixed assets transferred to unappropriated profit, equivalent to incremental depreciation charged during the current year, had also been taken into account.

Turnover for the year increased to Rs15.1 billion, from Rs12.8 billion the previous year. Analysts said that since ICI was operating in multiple fields, it had diversified revenue base as well as risk. However, the two main categories, Polyester Staple Fibre (PSF) and Soda Ash, were suffering from supply glut and import competition respectively. Other analysts stated that the company’s PSF business had been a victim of volatile petrochemical cycles during 2002, coupled with the 5 per cent reduction in effective protection against imported PSF.

Analysts said that huge fluctuations in prices of PSF and its raw material during the year had been one of the main features, due to which profitability of this segment had been volatile on a quarterly basis during financial year 2002. Paints business proved the saving grace, with demand growth from automobiles. ICI has called the annual general meeting on April 24, at the company’s registered office in Karachi.