ICI profits rise by Rs 1.287 billion

KARACHI (February 28 2003) : ICI Pakistan Limited profit recorded an increment of Rs 1.287 billion in 2002 on back of an adjustment of a write back of deferred tax and growth in PSF business, analysts said.

ICI Pakistan on Thursday released the financial accounts for the year 2002 where its profit rose to Rs 1.854 billion compared with Rs 567 million of the corresponding year.

Turnover amounted to Rs 15.073 billion and after deducting sales tax, commission and discounts, the net sale of the company totalled at Rs 12.218 billion, up from Rs 10.569 billion of the previous year.

The company also paid a final dividend of 25 percent for 2002 as compared with 20 percent of the preceding year.

According to an analyst the increase in profits was due to a write back of deferred taxes.

The adjustment made would be around Rs 1.14 billion where according to conservative estimates about Rs 1.87 billion is still in head of write back.

However, he added that all these write backs will be non-cash and thus not helping the company's cash flow in any matter.

Zaheeruddin Khalid head of research at First Capital Securities said that ICI have performed better than what it has during rest of the year.

The improvement during the second is expected to have come from the PSF business.

On the Soda Ash side too cost control measures are likely to result in improvement in profits.

The pharma business is also likely to benefit in terms of higher margins on account of the appreciation of rupee against the US dollar.

Average margins on PSF have also been slightly better as compared to last year, said a report of KASB Securities.

Average PSF margins for FY 2002 were $172 per tons as compared to $154 per ton. However, reduction in import tariffs on PSF by five percent has adversely affected the PSF industry.

The huge fluctuations in prices of PSF and its raw materials during the year has been one of the main features due to which profitability of this segment has been volatile on quarterly basis during FY 2002.

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