Financial Analysis
!"#"$!#%&'"#%()!) 50
Al Ghazi Tractors Ltd
Company Overview
Management Review
Financial Analysis
Stakeholder Information
Corporate Governance
Financial Statement
Other Information
KEY OPERATING AND FINANCIAL DATA 2017
2016
2015
2014
2013
2012
Sales
24423
16,206
13,385
12,416
14,071
25,456
Production
24091
16,005
13,584
13,014
14,055
23,820
18,871,448
12,098,828
9,636,109
8,780,685
9,262,626
14,779,564
5,259,738
3,348,741
2,499,478
2,268,143
2,069,369
2,791,227
Quantitative Data Units:
Rupees in thousand Profitability Sales revenue Gross profit Investment income
108,055
125,039
424,444
435,143
378,450
513,137
Profit before taxation
4,585,013
2,877,525
2,392,046
2,251,937
2,023,294
2,872,795
Taxation
1,461,893
950,641
799,763
677,193
651,804
957,164
Profit after taxation
3,123,120
1,926,884
1,592,283
1,574,744
1,371,490
1,915,631
Earnings before investment income, 4,536,000
2,810,598
2,013,749
1,859,004
1,683,845
2,396,532
Manpower Cost - Direct
tax and depreciation (EBITDA)
336,868
266,848
224,434
183,387
204,828
209,657
Manpower Cost - Indirect
236,217
217,209
263,981
219,621
196,481
165,435
Total Manpower Cost
573,085
484,057
488,415
403,008
401,309
375,092
714,732
649,897
612,208
Financial position Fixed assets
466,751
404,433
373,481
-
-
42,800
44,800
55,800
4,660
5,818
2,913
2,131
9,333
21,228
719,392
655,715
615,121
511,682
458,566
450,509
Current assets
5,161,939
3,988,601
5,789,546
9,477,010
9,367,867
9,019,772
Current liabilities
3,670,255
1,202,327
549,079
1,349,292
1,537,894
1,474,583
Net working capital
1,491,684
2,786,274
5,240,467
8,127,718
7,829,973
7,545,189
85,260
82,520
67,008
87,905
69,580
69,385
2,125,816
3,359,469
5,788,580
8,551,495
8,218,959
7,926,313
Long-term investments Other non-current assets
Less: Non-current liabilities Capital employed Represented by: Share capital Reserves Unappropriated profit
289,821
289,821
289,821
289,821
214,682
214,682
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
835,995
2,069,648
4,498,759
7,261,674
7,004,277
6,711,631
2,125,816
3,359,469
5,788,580
8,551,495
8,218,959
7,926,313
2,121,542
CASH FLOWS Operating activities
3,827,376
3,239,509
619,833
1,078,632
1,175,686
Investing activities
10,187
986,817
3,702,394
(342,666)
522,032
31,665
Financial activities
(3,803,822)
(4,339,794)
(4,321,698)
(1,219,754)
(1,071,853)
(1,177,685)
Annual Report 2017
51
ANALYSIS OF FINANCIAL RATIOS 2017
2016
2015
2014
2013
2012
Profitability Ratios Gross profit ratio
27.87%
27.68%
25.94%
25.83%
22.34%
18.89%
Pre-tax profit ratio
24.30%
23.78%
24.82%
25.65%
21.84%
19.44%
Net profit to Sales
16.55%
15.93%
16.52%
17.93%
14.81%
12.96%
EBITDA margin to sales
24.04%
23.23%
20.90%
21.17%
18.18%
16.22%
Operating Leverage ratio
1.10
1.55
0.85
-2.00
0.80
1.16
53.10%
41.49%
24.86%
15.77%
13.96%
20.23%
146.91%
57.36%
27.51%
18.41%
16.69%
24.17%
Current Ratio
1.41
3.32
10.54
7.02
6.09
6.12
Quick Ratio
0.78
2.15
6.61
5.42
4.99
5.07
0.37 20.28%
1.10 26.78%
4.24 6.43%
2.91 12.28%
1.50 12.69%
2.57 14.35%
5.61
Return on asset Return on Equity / Capital employed Liquidity Ratios
Cash to current liabilities Cashflow from opertions to sales Activity / Turnover Ratios Inventory turnover ratio
7.37
4.97
3.30
3.38
4.45
Debtors turnover ratio
129
79
464
98
34
74
Creditors turnover ratio
22
18
11
6
7
14
Fixed assets turnover ratio
26.40
18.62
15.74
18.81
22.90
39.57
Total assets turnover ratio
3.21
2.61
1.50
0.88
0.94
1.56
50
73
110
108
82
65
3
5
1
4
11
5
No. of days in payables
17
20
34
58
49
25
Operating Cycle
36
58
78
54
44
45
Pre-Tax Earning per share ( Basic and diluted) - Rs
79.10
49.64
41.27
38.85
47.12
66.91
Post -Tax Earning per share ( Basic and diluted) - Rs
53.88
33.24
27.47
27.17
31.94
44.62
Price earnings ratio
11.41
17.15
15.03
13.51
6.65
5.34
Dividend yield ratio
14.24%
13.16%
20.58%
6.81%
11.77%
9.44%
Operating Cycle No. of days in inventory No. of days in receivables
Investment / Market ratios
Dividend ratio
7.02
7.60
4.86
14.68
8.50
10.59
162.40%
225.61%
309.43%
92.02%
83.74%
50.43%
0.62
0.44
0.32
1.09
1.19
1.98
- Cash
87.50
62.50
85.00
25.00
25.00
22.50
- Bonus
-
-
-
0.35
-
Dividend payout ratio Dividend cover Dividend per share
Dividend payout - Rs ' 000 Cash dividend - %
5,071,868
4,347,315
4,926,957
1,449,105
1750%
1500%
1700%
500%
-
-
-
Bonus Dividend - Rs' 000
-
1,073,410
966,069
500%
450%
75,139
-
Market value per share - Rs - Closing
614.55
570.00
413.00
367.02
212.43
238.38
- High
784.04
718.89
564.00
464.24
246.70
255.00
- Low Market capitalisation - Rs Million Breakup value per share - Rs
52
525.00
378.78
295.00
195.00
193.89
169.89
35,622
33,041
23,940
21,275
9,121
10,235
36.67
57.96
99.86
147.53
191.42
184.61
Al Ghazi Tractors Ltd
Company Overview
Management Review
Financial Analysis
Stakeholder Information
Corporate Governance
Financial Statement
Other Information
SHARE PRICE SENSITIVITY ANALYSIS !"#$%&'()*+$,-)#,./-).().%0-,1.%2-3)4.0+)0+-) !"#$%&'()5%$%/.$1)#-,6!,"$%/-)$%3)+$()#!(.0.7-) /!,,-1$0.!%)4.+)0+-)6$/0!,().%89-%/.%:)0+-) !"#$%&'()#-,6!,"$%/-;) )"$%$:-"-%0)/!%(.3-,()0+-)6!11!4.%:)6$/0!,()0!)4+./+)0+-) performance and share price of the Company may be sensitive. GOVERNMENT DECISIONS Government decisions on crop prices, taxes, subsidized tractor schemes etc. are important drivers of the !"#$%&?()(+$,-)#,./-(;)@-/.(.!%()6$7!9,$=1-)0!)0+-) !"#$%&)+$7-)1-3)0!).%/,-$(-).%)(+$,-)#,./->)4+.1(0) decisions to the contrary have negatively impacted share price. PLANT OPERATIONS *0$=.1.0&)!6)#1$%0)!#-,$0.!%().()!6)#$,$"!9%0)."#!,0$%/-;)*0$=1-)#1$%0)!#-,$0.!%()$11!4)6!,)+.:+-,) #,!39/0.!%)$%3)$33)0!)0+-)#,!50$=.1.0&)!6)0+-) !"#$%&)4+./+)/$%)#!(.0.7-1&)$66-/0)0+-)(+$,-)#,./-; VARIATION IN MATERIAL COSTS A-.%:)$)"$%96$/09,.%:)/!%/-,%>)"$0-,.$1)/!(0)/!"#,.(-()!6)$)(.:%.5/$%0)#!,0.!%)!6)7$,.$=1-)/!(0;)B%&) .%/,-$(-).%)"$0-,.$1)/!(0()."#$/0()0+-):,!(()#,!50)$%3),-(910().%),-39/-3)#,!50(;)C+.()"$&)$37-,(-1&) affect the share price. LAW AND ORDER Political uncertainty makes business skittish and jeopardizes economic and business activity. Production (966-,()=-/$9(-)!6)(9##1&)/+$.%).((9-()$,.(.%:)!90)!6)1$4)$%3)!,3-,)#,!=1-"(
750
30.00% 25.00%
700
20.00% 650 15.00% 600
10.00%
550
5.00% 0.00%
500
-5.00% 450 -10.00% 400
-15.00% -20.00%
350 JAN
FEB
MARCH
APRIL
MAY
JUNE Share Price
Annual Report 2017
JULY
AUG
SEP
OCT
NOV
DEC
% Change
53
PERFORMANCE ANALYSIS ANALYSIS OF PROFIT AND LOSS SALES REVENUE C+-) !"#$%&)#!(0-3)$%)."#,-((.7-)09,%!7-,):,!40+)!6)DEF)$()/!"#$,-3)1$(0)&-$,;)C+-) !"#$%&) (!13)GH>HGI)0,$/0!,()39,.%:)0+-)&-$,)9%3-,),-7.-4)$()/!"#$,-3)0!)JE>GKE)9%.0()(!13).%)0+-)#,-7.!9() &-$,;)C+.()4$()"$.%1&)!%)$//!9%0)!6)."#,!7-3)6$,"-,'()-/!%!"./)+-$10+>),-/!:%.0.!%)!6) !"#$%&?() quality initiatives, continued product improvements and innovative marketing strategies adopted by the Company. GROSS PROFIT !"#$%&)+$()"$%$:-3)0!)."#,!7-).0()LMF)0!)GN;OF)6,!")GN;NF).%)&-$,)GKJE;)C+.()#-,6!,"$%/-).() $00,.=90$=1-)0!)$##,-/.$=1-),-(#!%(-)6,!")/9(0!"-,)0!)."#,!7-3)#,!39/0)P9$1.0&)/!9#1-3)4.0+)$33.0.!%$1) sales volume and effective cost management. B)(.:%.5/$%0).%/,-$(-)!6)OF).%)LMF)6,!")&-$,)GKJG).()$)#,!!6)/!"#$%&?()(0,-%:0+)$%3)#,!50$=.1.0&; DISTRIBUTION AND ADMINISTRATIVE EXPENSES The Company keeps a tight control on its overheads. The distribution cost has increased by 16.12% 9"91$0.7-)B%%9$1)L,!40+)Q$0-)R BLQS)(.%/-)GKJG>)4+-,-$()$3".%.(0,$0.7-)-T#-%(-()+$7-).%/,-$(-3)=&) 8.82% CAGR. OTHER INCOME Other income mainly represents income from investments. A declining trend in other income is mainly 39-)0!)#$&"-%0)!6)-T0,$)!,3.%$,&)3.7.3-%3()6,!")0+-)&-$,)GKJD)!%4$,3(;)U+./+)910."$0-1&),-(910-3).%) ,-39/-3).%7-(0"-%0().%)0+-)5%$%/.$1)"$,2-0;) PROFITABILITY C+-) !"#$%&?()#,!50$=.1.0&)7$,.-().%)1.%-)4.0+)0+-)($1-(),-7-%9-)$%3):,!(()#,!50;)C+-)#,!50)$60-,)0$T) (0!!3)$0)Q(;)I;J)=.11.!%).%)GKJN).%/,-$(-)!6)EGF)/!"#$,-3)0!)0+-)#,-7.!9()&-$,;)B()$),-(910)VMF)$1(!) 4.0%-((-3)$%).%/,-$(-3)6,!")JD;OI)F).%)GKJE)0!)JE;DD)F).%)GKJN;
ANALYSIS OF FINANCIAL POSITION EQUITY AND RESERVES WP9.0&)$%3),-(-,7-()+$7-)3-/,-$(-3)6,!")Q()I;I)=.11.!%).%)GKJE)0!)Q()G;J)=.11.!%;)C+-)3-/,-$(-).() attributable to extra ordinary dividend payouts amounting to Rs. 5 billion in the current year. PROPERTY, PLANT AND EQUIPMENT !"#$!%&'(#)*+%(*+,($-./#0$+%(1*2$(/+3!$*4$,(5!"0(64(789(0/))/"+(/+(:9;7(%"(64(
Al Ghazi Tractors Ltd
Company Overview
Management Review
Financial Analysis
Stakeholder Information
Corporate Governance
Financial Statement
Other Information
KEY OPERATING AND FINANCIAL DATA 2017
2016
2015
2014
2013
2012
Sales
24423
16,206
13,385
12,416
14,071
25,456
Production
24091
16,005
13,584
13,014
14,055
23,820
18,871,448
12,098,828
9,636,109
8,780,685
9,262,626
14,779,564
5,259,738
3,348,741
2,499,478
2,268,143
2,069,369
2,791,227
Quantitative Data Units:
Rupees in thousand Profitability Sales revenue Gross profit Investment income
108,055
125,039
424,444
435,143
378,450
513,137
Profit before taxation
4,585,013
2,877,525
2,392,046
2,251,937
2,023,294
2,872,795
Taxation
1,461,893
950,641
799,763
677,193
651,804
957,164
Profit after taxation
3,123,120
1,926,884
1,592,283
1,574,744
1,371,490
1,915,631
Earnings before investment income, 4,536,000
2,810,598
2,013,749
1,859,004
1,683,845
2,396,532
Manpower Cost - Direct
tax and depreciation (EBITDA)
336,868
266,848
224,434
183,387
204,828
209,657
Manpower Cost - Indirect
236,217
217,209
263,981
219,621
196,481
165,435
Total Manpower Cost
573,085
484,057
488,415
403,008
401,309
375,092
714,732
649,897
612,208
Financial position Fixed assets
466,751
404,433
373,481
-
-
42,800
44,800
55,800
4,660
5,818
2,913
2,131
9,333
21,228
719,392
655,715
615,121
511,682
458,566
450,509
Current assets
5,161,939
3,988,601
5,789,546
9,477,010
9,367,867
9,019,772
Current liabilities
3,670,255
1,202,327
549,079
1,349,292
1,537,894
1,474,583
Net working capital
1,491,684
2,786,274
5,240,467
8,127,718
7,829,973
7,545,189
85,260
82,520
67,008
87,905
69,580
69,385
2,125,816
3,359,469
5,788,580
8,551,495
8,218,959
7,926,313
Long-term investments Other non-current assets
Less: Non-current liabilities Capital employed Represented by: Share capital Reserves Unappropriated profit
289,821
289,821
289,821
289,821
214,682
214,682
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
835,995
2,069,648
4,498,759
7,261,674
7,004,277
6,711,631
2,125,816
3,359,469
5,788,580
8,551,495
8,218,959
7,926,313
2,121,542
CASH FLOWS Operating activities
3,827,376
3,239,509
619,833
1,078,632
1,175,686
Investing activities
10,187
986,817
3,702,394
(342,666)
522,032
31,665
Financial activities
(3,803,822)
(4,339,794)
(4,321,698)
(1,219,754)
(1,071,853)
(1,177,685)
Annual Report 2017
51
ANALYSIS OF FINANCIAL RATIOS 2017
2016
2015
2014
2013
2012
Profitability Ratios Gross profit ratio
27.87%
27.68%
25.94%
25.83%
22.34%
18.89%
Pre-tax profit ratio
24.30%
23.78%
24.82%
25.65%
21.84%
19.44%
Net profit to Sales
16.55%
15.93%
16.52%
17.93%
14.81%
12.96%
EBITDA margin to sales
24.04%
23.23%
20.90%
21.17%
18.18%
16.22%
Operating Leverage ratio
1.10
1.55
0.85
-2.00
0.80
1.16
53.10%
41.49%
24.86%
15.77%
13.96%
20.23%
146.91%
57.36%
27.51%
18.41%
16.69%
24.17%
Current Ratio
1.41
3.32
10.54
7.02
6.09
6.12
Quick Ratio
0.78
2.15
6.61
5.42
4.99
5.07
0.37 20.28%
1.10 26.78%
4.24 6.43%
2.91 12.28%
1.50 12.69%
2.57 14.35%
5.61
Return on asset Return on Equity / Capital employed Liquidity Ratios
Cash to current liabilities Cashflow from opertions to sales Activity / Turnover Ratios Inventory turnover ratio
7.37
4.97
3.30
3.38
4.45
Debtors turnover ratio
129
79
464
98
34
74
Creditors turnover ratio
22
18
11
6
7
14
Fixed assets turnover ratio
26.40
18.62
15.74
18.81
22.90
39.57
Total assets turnover ratio
3.21
2.61
1.50
0.88
0.94
1.56
50
73
110
108
82
65
3
5
1
4
11
5
No. of days in payables
17
20
34
58
49
25
Operating Cycle
36
58
78
54
44
45
Pre-Tax Earning per share ( Basic and diluted) - Rs
79.10
49.64
41.27
38.85
47.12
66.91
Post -Tax Earning per share ( Basic and diluted) - Rs
53.88
33.24
27.47
27.17
31.94
44.62
Price earnings ratio
11.41
17.15
15.03
13.51
6.65
5.34
Dividend yield ratio
14.24%
13.16%
20.58%
6.81%
11.77%
9.44%
Operating Cycle No. of days in inventory No. of days in receivables
Investment / Market ratios
Dividend ratio
7.02
7.60
4.86
14.68
8.50
10.59
162.40%
225.61%
309.43%
92.02%
83.74%
50.43%
0.62
0.44
0.32
1.09
1.19
1.98
- Cash
87.50
62.50
85.00
25.00
25.00
22.50
- Bonus
-
-
-
0.35
-
Dividend payout ratio Dividend cover Dividend per share
Dividend payout - Rs ' 000 Cash dividend - %
5,071,868
4,347,315
4,926,957
1,449,105
1750%
1500%
1700%
500%
-
-
-
Bonus Dividend - Rs' 000
-
1,073,410
966,069
500%
450%
75,139
-
Market value per share - Rs - Closing
614.55
570.00
413.00
367.02
212.43
238.38
- High
784.04
718.89
564.00
464.24
246.70
255.00
- Low Market capitalisation - Rs Million Breakup value per share - Rs
52
525.00
378.78
295.00
195.00
193.89
169.89
35,622
33,041
23,940
21,275
9,121
10,235
36.67
57.96
99.86
147.53
191.42
184.61
Al Ghazi Tractors Ltd
Company Overview
Management Review
Financial Analysis
Stakeholder Information
Corporate Governance
Financial Statement
Other Information
SHARE PRICE SENSITIVITY ANALYSIS !"#$%&'()*+$,-)#,./-).().%0-,1.%2-3)4.0+)0+-) !"#$%&'()5%$%/.$1)#-,6!,"$%/-)$%3)+$()#!(.0.7-) /!,,-1$0.!%)4.+)0+-)6$/0!,().%89-%/.%:)0+-) !"#$%&'()#-,6!,"$%/-;) )"$%$:-"-%0)/!%(.3-,()0+-)6!11!4.%:)6$/0!,()0!)4+./+)0+-) performance and share price of the Company may be sensitive. GOVERNMENT DECISIONS Government decisions on crop prices, taxes, subsidized tractor schemes etc. are important drivers of the !"#$%&?()(+$,-)#,./-(;)@-/.(.!%()6$7!9,$=1-)0!)0+-) !"#$%&)+$7-)1-3)0!).%/,-$(-).%)(+$,-)#,./->)4+.1(0) decisions to the contrary have negatively impacted share price. PLANT OPERATIONS *0$=.1.0&)!6)#1$%0)!#-,$0.!%().()!6)#$,$"!9%0)."#!,0$%/-;)*0$=1-)#1$%0)!#-,$0.!%()$11!4)6!,)+.:+-,) #,!39/0.!%)$%3)$33)0!)0+-)#,!50$=.1.0&)!6)0+-) !"#$%&)4+./+)/$%)#!(.0.7-1&)$66-/0)0+-)(+$,-)#,./-; VARIATION IN MATERIAL COSTS A-.%:)$)"$%96$/09,.%:)/!%/-,%>)"$0-,.$1)/!(0)/!"#,.(-()!6)$)(.:%.5/$%0)#!,0.!%)!6)7$,.$=1-)/!(0;)B%&) .%/,-$(-).%)"$0-,.$1)/!(0()."#$/0()0+-):,!(()#,!50)$%3),-(910().%),-39/-3)#,!50(;)C+.()"$&)$37-,(-1&) affect the share price. LAW AND ORDER Political uncertainty makes business skittish and jeopardizes economic and business activity. Production (966-,()=-/$9(-)!6)(9##1&)/+$.%).((9-()$,.(.%:)!90)!6)1$4)$%3)!,3-,)#,!=1-"(
750
30.00% 25.00%
700
20.00% 650 15.00% 600
10.00%
550
5.00% 0.00%
500
-5.00% 450 -10.00% 400
-15.00% -20.00%
350 JAN
FEB
MARCH
APRIL
MAY
JUNE Share Price
Annual Report 2017
JULY
AUG
SEP
OCT
NOV
DEC
% Change
53
PERFORMANCE ANALYSIS ANALYSIS OF PROFIT AND LOSS SALES REVENUE C+-) !"#$%&)#!(0-3)$%)."#,-((.7-)09,%!7-,):,!40+)!6)DEF)$()/!"#$,-3)1$(0)&-$,;)C+-) !"#$%&) (!13)GH>HGI)0,$/0!,()39,.%:)0+-)&-$,)9%3-,),-7.-4)$()/!"#$,-3)0!)JE>GKE)9%.0()(!13).%)0+-)#,-7.!9() &-$,;)C+.()4$()"$.%1&)!%)$//!9%0)!6)."#,!7-3)6$,"-,'()-/!%!"./)+-$10+>),-/!:%.0.!%)!6) !"#$%&?() quality initiatives, continued product improvements and innovative marketing strategies adopted by the Company. GROSS PROFIT !"#$%&)+$()"$%$:-3)0!)."#,!7-).0()LMF)0!)GN;OF)6,!")GN;NF).%)&-$,)GKJE;)C+.()#-,6!,"$%/-).() $00,.=90$=1-)0!)$##,-/.$=1-),-(#!%(-)6,!")/9(0!"-,)0!)."#,!7-3)#,!39/0)P9$1.0&)/!9#1-3)4.0+)$33.0.!%$1) sales volume and effective cost management. B)(.:%.5/$%0).%/,-$(-)!6)OF).%)LMF)6,!")&-$,)GKJG).()$)#,!!6)/!"#$%&?()(0,-%:0+)$%3)#,!50$=.1.0&; DISTRIBUTION AND ADMINISTRATIVE EXPENSES The Company keeps a tight control on its overheads. The distribution cost has increased by 16.12% 9"91$0.7-)B%%9$1)L,!40+)Q$0-)R BLQS)(.%/-)GKJG>)4+-,-$()$3".%.(0,$0.7-)-T#-%(-()+$7-).%/,-$(-3)=&) 8.82% CAGR. OTHER INCOME Other income mainly represents income from investments. A declining trend in other income is mainly 39-)0!)#$&"-%0)!6)-T0,$)!,3.%$,&)3.7.3-%3()6,!")0+-)&-$,)GKJD)!%4$,3(;)U+./+)910."$0-1&),-(910-3).%) ,-39/-3).%7-(0"-%0().%)0+-)5%$%/.$1)"$,2-0;) PROFITABILITY C+-) !"#$%&?()#,!50$=.1.0&)7$,.-().%)1.%-)4.0+)0+-)($1-(),-7-%9-)$%3):,!(()#,!50;)C+-)#,!50)$60-,)0$T) (0!!3)$0)Q(;)I;J)=.11.!%).%)GKJN).%/,-$(-)!6)EGF)/!"#$,-3)0!)0+-)#,-7.!9()&-$,;)B()$),-(910)VMF)$1(!) 4.0%-((-3)$%).%/,-$(-3)6,!")JD;OI)F).%)GKJE)0!)JE;DD)F).%)GKJN;
ANALYSIS OF FINANCIAL POSITION EQUITY AND RESERVES WP9.0&)$%3),-(-,7-()+$7-)3-/,-$(-3)6,!")Q()I;I)=.11.!%).%)GKJE)0!)Q()G;J)=.11.!%;)C+-)3-/,-$(-).() attributable to extra ordinary dividend payouts amounting to Rs. 5 billion in the current year. PROPERTY, PLANT AND EQUIPMENT !"#$!%&'(#)*+%(*+,($-./#0$+%(1*2$(/+3!$*4$,(5!"0(64(789(0/))/"+(/+(:9;7(%"(64(
