KARACHI, Jan 20: For the year 2001, Bilal Fibres Limited had declared interim cash dividend at 5 per cent (50 paisa per share of Rs10) for the minority shareholders. Albeit just a token, the dividend last year had come as a surprise to everyone, for it was the first in ten years—since the company sought listing at the stock exchange in 1991. Directors, sponsors and associated undertakings had waived-off their right to the payout. The year 2002 has again gone blank.
The share in Bilal Fibres of the par value of Rs10, although trading at more than 50 per cent discount to the par value, has, nonetheless, taken quite a leap from just about 75 paisa a share that the scrip was doing in 2001. The scrip’s record high price was Rs17.50 in 1991.
Together with scores of other companies, Bilal Fibres’ stock had been relegated to the ‘defaulters’ counter’ of the KSE, for failing to comply with certain listing regulations. On the declaration of interim dividend, the KSE shifted the company name from the ‘Defaulters’ to the ‘normal counter’ from May 2 last year.
Those who do not approve of the regulation regarding compulsory dividend distribution by companies are likely to frown at the Bilal board for dishing out a dividend from current profit last year, while the company still carries a huge deficit on its balance sheet. But for the minority shareholders, even the five per cent that came last year was small blessing.
At end-September 2002, Bilal Fibres had accumulated losses amounting to Rs200.9 million, against the paid-up capital of Rs141.0 million. Break-up value of the stock worked out at Rs4.25 in the negative. The company also held Rs228.6 million as surplus on revaluation of fixed assets, which if included, would produce the break-up value of Rs11.99 in the positive. But would it be justifiable to include revaluation of asset surplus in the calculation of the break-up value?
For the year ended September 30, 2002, Bilal Fibres posted net profit of Rs31.2 million, compared with net profit of Rs35.9 million the previous year. “The decline in profit is mainly attributed to consistent slump in the yarn market,” directors wrote in their annual report, adding that though the raw material prices had remained on the lower side, the decrease was not proportionate to the decrease in finished goods’ rate.
Gross profit amounted to Rs60.1 million against Rs69.8 million in the previous year, representing decrease in percentage to sales at 14.36, from 15.86 per cent. Operating profit at Rs48.4 million for the year under review worked out at 11.57 per cent, compared with Rs57.5 million, which was 13.1 per cent in 2001.
Current ratio worked out at 0.65:1. Long term loans were Rs85.4 million and liabilities against assets subject of finance lease amounted to Rs8.5 million. Current portion of long term liabilities amounted to Rs18.9 million. Directors contended that the company was making regular payments to its lenders on due dates and there was no overdue default. Total assets of the company at year-end stood at Rs366.4 million, up from Rs199.5 million last year due to the revaluation surplus.
At September 30, 2002, the Bilal Textiles (Pvt) Limited held 23.4 per cent shares in the company. Other major stakeholders were two directors with holding of 15.8 and 13.8 per cent, respectively. A total of 1590 individuals representing the general public had 10.6 per cent of the company stock.
The company plant is located at 38th km, Sheikhupura Road, Tehsil Jaranwala, district, Faisalabad. The mill has 20,160 spindles and installed production capacity of 6.1 million kg of yarn (20’s) count. Actual production during the year stood at 7.1 million yarn, which marked increase over the output of 6.9 million kg last year.
At near the end of the year, directors said they saw no signs of improvement in yarn market in the near future. On the contrary, the cotton & PSF prices were on much higher side and the power rates were also expected to be increased shortly, which was why there were expectations of little improvement in the financial position of the company in 2003.