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Corporate Briefing
Lahore Stock Exchange
March 24, 2011
AL - QURAN
That man can have nothing but what he strives for; 39 That
(the fruit of) his striving will soon come in sight. 40
Presenters:
Badar ul Hassan Chief Financial Officer
Imran Javed Assistant GM Finance
AGENDA
Introduction
Our Mission and Vision
Corporation’s Management
Business Segments
Investments Portfolio
Growth Plans
Financial Performance Highlights
Share Price Analysis
Corporation’s Assets
Latest Financial Results
Future Outlook
Questions & Answers
Introduction
Nishat has a very broad base of customers for its products both in and
outside Pakistan. The company has long working relationship with top
brands of the world such as J.K.N. International, Levis, Next, Pincroft
Dyeing, Ocean Garments, Arnold Kock, Gap, Carreman and Sinha
Fashion.
Major portion of Company’s earnings is export based. Nishat has
achieved significant geographical diversification in its export sales mix
over the years. Geographical Spread
2010 2009
Rupees in thousands
Europe 8,759,128 7,051,422
Asia, Africa & Australia 11,803,566 9,723,826
USA & Canada 3,660,713 1,938,695
24,223,407 18,713,943
Export sales are expected to be more than Rs 31 billion for the financial
year 2010-2011.
Introduction (continued)
Product Mix
8% 2%
28%
13%
18%
4% 27%
Miscellaneous
Introduction (continued)
The strength of the company also includes top quality and highly
competent professional resources to manage the affairs.
Nishat is a Green Company and has got certificates of ISO-9001,
IKO-TEX 100, SA-8000 and Citypad.
Over the years Nishat has established Nishat USA, Nishat Linen
Trading LLC – UAE and Nishat Power Limited as its subsidiary
companies to further strengthen its textile business in new markets
and diversifying into growing electricity sector.
Introduction (continued)
Nishat has got excellent credit ratings of AA- for long term and A1+ for
short term from PACRA which reflects its ability to maintain its position in
the key markets despite tough economic times. Over the years it has not
only maintained but improved its long term credit rating.
Introduction (continued)
Mission
To provide quality products to customers and explore new markets to
promote/expand sales of the Company through good governance and
foster a sound and dynamic team, so as to achieve optimum prices of
products of the Company for sustainable and equitable growth and
prosperity of the Company.
Vision
To transform the Company into a modern and dynamic yarn, cloth and
processed cloth and finished product manufacturing company that is
fully equipped to play a meaningful role on sustainable basis in the
economy of Pakistan.
Also to transform the Company into a modern and dynamic power
generating company that is fully equipped to play a meaningful role on
sustainable basis in the economy of Pakistan.
Corporation’s Management
Board of Directors
Audit Committee
Executive Management
Mian Umer Mansha Chief Executive Officer
Mr. Badar ul Hassan Chief Financial Officer
Mr. Khalid Mahmood Chohan Company Secretary
Business Segments
Nishat has the following five reportable business segments. Each segment
has production facilities located at various locations.
Spinning:
Production of different qualities of yarn (more than 100 different counts)
using natural and artificial fibers with production capacity of 64.713 million
kgs of yarn per annum. There is average daily consumption of 138,000 kgs
of local cotton and 20,000 kgs of imported cotton. We have an average PC
yarn mix of 80% cotton and 20% polyster. Out of total cotton purchases
around 90% purchase is from local market and 10% is imported.
Weaving:
Garments:
Power Generation:
Generation and distribution of power using gas, furnace oil, diesel and
steam. We have power generation capacity of 85 MW whereas our average
consumption is approximately 40 MW. In power plants are installed engines
from Mak, Jenbacher, Caterpillar, Wartsila, Dai Hatsu and Cummins.
Business Segments (continued)
Revenue
8% 1%
30%
42%
19%
Spinning Weaving
Processing & home textile Garments
Power
Investment Portfolio
• A new wholly owned subsidiary with the name of Nishat Linen Trading
LLC has been incorporated in Dubai, United Arab Emirates and it is
expected to open its first retail outlet in Dubai Festival City Mall by May
2011. We are expecting to open six retail outlets in UAE with a total
investment of US $ 2.75 million.
• The Company has earned revenue of Rs 21.345 billion during the half
year ended 31 December 2010 and is expected to increase its revenue
for the financial year 2010-2011 over Rs 40 billion with an approximate
increase of 30% from the previous financial year.
Financial Performance Highlights
Over the last ten financial years Nishat has been able to show excellent
financial performance and has maximized the value for its shareholders
through payment of dividends and increasing net worth of company.
At a Glance
Description 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Revenue Rs. (million) 11,662 11,948 13,209 14,876 11,375 16,660 17,180 19,590 23,870 31,536
Gross Profit Rs. (million) 2,057 2,028 1,888 1,934 2,135 2,958 2,845 2,812 4,352 5,980
Net Profit Rs. (million) 315 202 411 751 1,867 1,633 1,211 5,858 1,268 2,915
Gross Profit Ratio % 17.6% 17.0% 14.3% 13.0% 18.8% 17.8% 16.6% 14.4% 18.2% 19.0%
Net Profit Ratio % 2.7% 1.9% 3.1% 5.1% 16.4% 9.8% 7.5% 29.9% 5.3% 9.2%
Dividend % 15% 0% 15% 20% 25% 15% 25% 25% 20% 25%
Dividend per share Rs. 1.5 - 1.5 2 2.5 1.5 2.5 2.5 2 2.5
Earning per share Rs. 2.83 1.65 3.35 5.17 12.86 10.22 7.58 36.86 6.23 10.5
Interest Cover Times 1.37 1.34 1.86 3.13 5.99 3.33 2.66 7.44 2.08 3.92
Current Ratio 0.97 : 1 1.04 : 1 1.03 : 1 1.22 : 1 1.24 :1 1.38 : 1 1.74 : 1 0.73 : 1 0.86 : 1 1.11 : 1
Gearing Ratio 63.89 63.59 57.15 53.54 38.02 29.64 21.24 29.62 34.34 25.53
Shareholders' equity Rs. (million) 4,730 4,267 6,118 7,851 12,806 20,594 30,164 26,492 19,331 31,376
Return on equity % 6.66% 4.72% 6.71% 9.57% 14.58% 7.93% 4.02% 22.11% 6.56% 9.29%
Market Price Rs. 11 14 26 43 75 105 130 86 38 43
Break-up Value Rs. 42.48 38.33 49.95 64.1 88.16 141.78 188.78 165.8 79.72 89.24
Total Assets Rs. (million) 14,222 12,796 15,455 19,582 21,918 30,661 39,587 40,277 31,513 46,182
Financial Performance Highlights (continued)
Net revenue
35,000
30,000
Rupees (millions)
25,000
20,000
15,000
10,000
5,000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
11,662 11,948 13,209 14,876 11,375 16,660 17,180 19,590 23,870 31,536
Years
270% growth in net revenue in last ten years.
Financial Performance Highlights (continued)
6,000
5,000
Rupees (millions)
4,000
3,000
2,000
1,000
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Profit 2,057 2,028 1,888 1,934 2,135 2,958 2,845 2,812 4,352 5,980
Net Profit 315 202 411 751 1,867 1,633 1,211 5,858 1,268 2,915
Years
925% growth from net profit in 2001 to net profit in 2010.
Financial Performance Highlights (continued)
35%
30%
25%
Percentage
20%
15%
10%
5%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Profit 17.64% 16.97% 14.29% 13.00% 18.77% 17.76% 16.56% 14.35% 18.23% 18.96%
Net Profit 2.70% 1.90% 3.10% 5.10% 16.42% 9.80% 7.50% 29.90% 5.30% 9.20%
Years
Financial Performance Highlights (continued)
60%
50%
40%
Percentage
30%
20%
10%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Dividend Yield 10.71% 0.00% 5.77% 4.65% 3.33% 1.43% 1.92% 2.91% 5.29% 4.64%
Dividend Payout 53.00% 0.00% 44.78% 38.68% 19.44% 14.68% 32.98% 6.78% 32.10% 23.81%
Years
Financial Performance Highlights (continued)
40
35
30
25
Rupees
20
15
10
5
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EPS 2.83 1.65 3.35 5.17 12.86 10.22 7.58 36.86 6.23 10.5
Dividend 1.5 0 1.5 2 2.5 1.5 2.5 2.5 2 2.5
Years
Financial Performance Highlights (continued)
5
Times
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Interest Cover 1.37 1.34 1.86 3.13 5.99 3.33 2.66 7.44 2.08 3.92
Years
Current Ratio
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Current Ratio 0.97 1.04 1.03 1.22 1.24 1.38 1.74 0.73 0.86 1.11
Years
Financial Performance Highlights (continued)
Gearing Ratio
70
60
50
40
30
20
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gearing 63.89 63.59 57.15 53.54 38.02 29.64 21.17 30.62 34.34 25.53
Years
Shareholders' Equity
35,000
30,000
25,000
Rupees (000)
20,000
15,000
10,000
5,000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SHE 4,718 4,255 6,118 9,502 12,806 20,594 30,164 26,492 19,331 31,376
Years
• 665% growth in shareholders’ equity in last ten years.
Financial Performance Highlights (continued)
Return on Equity
25%
20%
Percentage
15%
10%
5%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
ROE 6.66% 4.72% 6.71% 9.57% 14.58% 7.93% 4.02% 22.11% 6.56% 9.29%
Years
Share Price Analysis
200.00
150.00
Rupees
100.00
50.00
0.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Market Price 10.95 14.00 26.00 43.00 75.00 105.00 130.00 86.00 38.00 43.00
Break-up Value 42.48 38.33 49.95 64.10 88.16 141.78 188.78 165.80 79.72 89.24
Years
• Break up value per share has always been higher than market value per
share in last ten years. Market price at 21 March 2011 was Rs 62.92 per
share.
Corporation’s Assets
50,000
45,000
40,000
Rupees (millions)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Total Assets 14,222 12,796 15,455 19,582 21,918 30,661 39,587 40,277 31,513 46,182
Years
• 325% growth in total assets in last ten years.
Latest Financial Results
for half year ended 31 Dec 2010 (continued)
924,542 100.00
Latest Financial Results
for half year ended 31 Dec 2010 (continued)
189,039 100.00
Thank You