ICI earns Rs 419 million after-tax profit in six months of 2003

KARACHI (August 11 2003) : ICI Pakistan's profit after tax amounted to Rs 419 million in the first six months of 2003, showing an improvement of 85 percent over the net income reported in the corresponding period of last year of Rs 227 million.

The fabulous results have been mainly driven by improved sales generation across the business segments, which grew by 77 percent period-on-period basis.

The company's net margins improved on back of 41 percent decline in the financial charges for the period, where the company availed the opportunity of low interest rates in the country.

The expansion in the PSF segment, better market conditions for paints business along with the new furnace oil business provided the company with strong turnover for the period.

In line with this, the company's aggressive business development and promotional activities helped in showing improved performance for the company.

An analyst from Capital One Equities said that the company's diversification strategy would surely payoff, which would reduce its corporate business risk in the coming years.

For the first quarter of 2003, ICI had posted a profit after tax of Rs 172 million (EPS: Rs 1.24) as compared to Rs 25 million (EPS: Rs 0.18), up by nearly seven times, mainly driven by the 90 percent voluminous growth in the turnover over the discussed period.

This factor, combined with other positives for the various business segments of the company, notably the paints, chemicals and life sciences, (constituting 57 percent of the total operating profit for 1Q-FY03, which stood at Rs 288 million) resulted in tremendous improvement in the company's earnings.

Also, for the other two business segments–PSF and Soda Ash–the company managed to perform better than the same period last year due to its emphasis on cost controls and production efficiency.

The scrip on Wednesday soared to Rs 73.40, up by Rs 3.85 from previous day's closing on the better than expected earnings announcement of the company.

Although the scrip has already appreciated by nearly 34 percent from its January 1, 2003 price level of Rs 54.60, the company's strategic intent in a diversified range of businesses.

Whereby it is making efforts to strengthen its market position through efficient operations management and marketing can offer a growth-oriented perspective.

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