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INDUSTRY PROFILE
COMPANY PROFILE
VERTICAL ANALYSIS
HORIZONTAL ANALYSIS
PROFITABILITY RATIOS
LIQUIDITY RATIOS
SOLVENCY RATIOS
ACTIVITY/ TURNOVER RATIOS
CONCLUSION
INDUSTRY PROFILE
HISTORY
Multinational company
More than 70,000 employees
More than 130 countries
Abbott Pakistan is part of Abbott Laboratories, Chicago, USA
1948, started operating in Pakistan
Two manufacturing facilities located in Landhi and Korangi in Karachi
Abbott Pakistan has leadership in the field of Pain Management, Anesthesia, Medical
Nutrition and Anti-Infective
On June 29, 2005 Abbott Pakistan Achieved Class ‘A’ accreditation against the Oliver
Wight ABCD Check list
COMPETITORS
2018 2017
9.10%
32.90%
38.70%
16.10%
COMMENT
2018 2017 Total assets turnover ratio
(average assets) increased
to 1.51 in 2018 from 1.42 in
TOTAL 1.51 1.42 2017 mainly due to increase
in sales during the year.
ASSET times times
TURNO
VER
DUPONT ANALYSIS
December December
31,2018 31,2018
Return on equity has declined to 20.4% from 29.3% during 2018 driven
by devaluation of Pakistani Rupee coupled with inflation.
Interest burden / efficiency remained relatively stable since the
Company has a very minor portion of debt in its capital structure.
Tax efficiency has deteriorated on account of the impact of Super tax
charges for Tax year 2018 and 2019 and higher tax under the final tax
regime.
Assets turnover increased to 1.51 in 2018 from 1.42 in 2017 mainly due
to increase in sales during the year.
LIQUIDITY RATIOS
COMMENT ON LIQUIDITY RATIOS
2018 2017
Cash inflows from operating activities
declined versus last year primarily on
CURRENT 1.96 times 2.98 times account of decrease in profitability and
working capital changes. The Company,
RATIO however, remains sufficiently liquid and has
Rs. 5,678.14 million of cash and cash
equivalents as of 31st December 2018 to
QUICK / ACID 1.27 times 2.19 times meet its investment and operational cash
TEST RATIO requirements.
Current ratio (2018: 1.96, 2017: 2.98),
CASH TO 0.86 times 1.86 times quick / acid test ratio (2018: 1.27, 2017:
2.19) and cash to current liabilities (2018:
CURRENT 0.86, 2017: 1.86) have declined versus last
LIABILITIES year mainly on account of higher payable
balances.
SOLVENCY RATIOS
2018 2017
DEBT RATIO 34.7% 25.2%
Total equity decreased by 7.8% to Rs. 13.24 billion comprising of share capital
amounting to Rs. 979.003 million which consists of issued share capital of 97,900,302
shares of Rs. 10.00 each. Abbott Asia Investments Limited, UK is the major
shareholder of the Company, having 76,259,454 shares being 77.90% of total paid-up
capital.
The Company entered into a finance lease arrangement during the year, which carries
markup at the rate of 6-month KIBOR plus 0.5% per annum.
Interest cover ratio has declined versus last year on account of decrease in profit
before interest and tax and increase in interest costs due to finance lease.
ACTIVITY / TURNOVER RATIOS
2018 2017
DAYS’ SALES IN RECEIVABLES 14.6 days 13.2 days
Net sales for the year increased by 13.9% over previous year. Pharmaceutical sales
increased by 12.0% driven by sustained volume growth of established brands.
Nutritional sales increased by 23.6% mainly due to volume growth in PediaSure and
Ensure. General Health Care (GHC), Diagnostic and Diabetes Care cumulatively grew
by 12.1%.
Cost of sales of the Company increased primarily on account of increase in volumes,
currency devaluation and inflation.
The decrease in current assets is mainly due to lower cash and bank balances
primarily on account of decrease in profitability. This has been partially offset by
increase in inventory balances to cater for future sales requirements.
CONCLUSION
Abbott laboratories conducts its business in a responsible manner, with honesty and
integrity. The company is earning profit. The company Assets are more than its
liabilities.
Gross profit and Net profit decreases as compared to pervious years due to mainly on
account of currency devaluation, inflation, advertising and sales promotion expenditure
and inadequate price adjustments in the pharmaceutical segment.
Equity declined from prior year primarily due to final (2017) and interim (2018)
dividends paid during the year, partially offset by profit for the year.