KARACHI, March 7: Clariant Pakistan Limited is scheduled to hold its annual general meeting on March 28, at the company’s registered office in Karachi. One of the important items on the agenda is the approval of final cash dividend at 55 per cent, which together with the interim already paid at 25 per cent, would make total payout at 80 per cent for the year. Directors have decided to pay Rs2 per share more than last year, since the company’s per share earnings improved by Rs4.64 to Rs14.28 from Rs9.64 per share, the year ago. Total dividend at Rs8 per share for the year ended December 31, 2002 is nonetheless, highest ever payout.

For the year, the company also earned the highest ever after tax profit amounting to Rs222.8 million and made the record best turnover at Rs3,890.5 million. The current market price of the 10-rupee share in Clariant is Rs72.20, which places it on price-to-earnings multiple of 5x. Break-up value of the share worked out at Rs34.29 on December 31, 2002 and paid-up capital of the company stood at Rs156 million. Parent company, Clariant International Limited Muttenz, Switzerland holds 75 per cent of the company stock. NIT and ICP have 12 per cent stake while some 805 individuals claim 8 per cent shareholding in Clariant Pakistan.

Listed in 1997, the company had issued bonus shares at 35 per cent that year; cash was also omitted for 1998 and bonus shares issued, instead, at 15 per cent. For 1999, the board distributed cash at 25 per cent, doubled to 50 per cent for 2000 and raised to 60 per cent for 2001.

It was in 1996 that the Swiss pharmaceutical giant, Sandoz decided to spin off the company’s chemical arm world-wide and to entrust the activity to a new company, “Clariant”. Effective July 1, 1997, Clariant also acquired the net assets of the speciality chemicals division of Hoechst Marion Roussel (Pakistan) Limited (formerly Hoechst Pakistan Limited) ‘at fair values against cash consideration of Rs370.5 million’.

Principal lines of business of Clariant Pakistan are now said to be to manufacture and sell chemicals, dyestuffs, emulsions and masterbatches. The company also acts as an indenting agent.

Directors appear pleased by the 9 per cent growth in turnover to Rs3,890.5 million for the year ended December 31, 2002, from year ago turnover at Rs3,570.6 million. Directors stated that the company’s customers in the leather industry especially the garment sector, had not been able to fully adjust to the conditions arising from the ‘nine-eleven’ incident. “Business conditions in the textile sector have, however, improved and hopefully similar improvement may happen to the leather industry in year 2003”. Company also said that selling prices had remained under severe pressure due to the import of cheaper dyes and chemicals, strengthening of Pak Rupee against the US dollar and in certain cases, under-invoicing of finished imported goods. As always, the worst impact was on textile and leather dyes as well as masterbatches. However, the company was said to have been able to maintain its market leadership, not allowing competition to make inroads into the customer base, which was said to have been gradually expanding over the past few years.

Operating profit for the year ended December 31, 2002 improved 15.5 per cent to Rs574.7 million, from Rs497.6 million in the earlier year, with operating margin up to 19.2 per cent, from 17.9 per cent. Financial charges stood reduced by 20.8 per cent to Rs179.3 million, from Rs225.6 million, which was a major contributing factor in producing a brighter bottomline.

Including reserves of Rs370 million, the total shareholders’ equity amounted to Rs535.0 million. Current ratio worked out strong at 1.12:1. Operating assets at end-December stood at Rs594.3 million and capital work-in-progress was Rs23.3 million.

During the year under review, the production facility for emulsions was shifted from Aventis Pharma (Pakistan) Limited (formerly Hoechst Marion Roussel Pakistan Limited) Korangi site to Jamshoro. “Together with 7,000 tons per annum plant purchased from Hoechst Ravi Polymers Limited in Sheikhupura, the company now has a total emulsions production capacity of 15,000 tons at Jamshoro”, said the directors.