Habib adm writeup
Established as Habit Raked Limited in 1980, Habit-DAM Limited is a world pioneer in producing starch sugars from rice. Consistent R&D over the years has made the company one of the most diversified producers of starch sugars in the world. Habit- DAM Limited and its subsidiary companies produce and market a wide range of rice based starch sugars and protein concentrates.
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Popular starch sugars include Clarified Rice Syrups, Brown Rice Syrups, High Fructose Syrup, Rice Syrup Solids, Maillot Syrup, Servitor Syrup, and Maledictions – all essential ingredients for the food, confectionery, and pharmaceutical industries. Looking at overall scenario of sugar sector itself from the past years to the recent market situation we can observe many ups and down and still some new challenges yet to unfold in the near future. Global sugar prices averaged at $24. Lb during the 1st quarter (IQ) of 2012 and are expected to drop to $20 per lb by IQ 2013. Sugar prices worldwide are expected to fall around 19%. Sugar industry in Pakistan is also not showing that much profitability s it shown in past years following the global trend except the industries one of the reason for that seems to be the price of input, sugarcane, is set by the provincial government, is increased by 10-15% every year while prices of out put, refined white sugar, is falling because global glut of sugar production.
Only sugar companies with ethanol operations are showing some reasonable growth and profitability. Analysis as per nine month ended 31st March 2013 The gross sales of nine month ended March 2013 shows around 21 . 12% decline as of the same period in 2012. The gross profit margin decreased from 32. 42% to 27. 84% round 16% change from last year same period financial results. The administrative expense increased by 2. 21% and distribution expense incremented by 10. 57%. The amount of other operating charges decreased by 39%.
The operating profit decrease by 50. 96% and also the operating profit margin decrease from 22. 23% to 14. 19% from the last year same period results, The Company’s finance cost decreased by 5. 79%. The total net other income figure observe almost double change in positive figures primarily due to income from short term investment and gain on sale of property, plant and equipment, and secondary due to increment on exchange gain ND dividend from subsidiaries. The Profit before tax observe a drastic decrease of 39. 78% in the current period w. . T last year same period. Same as if we tally the nine month ended data of same periods that will conclude a big shift in overall profit after tax by 37% negative, making the net profit margin at 1 1. 55% from last year’s 14. 69%, a change of 21% in total. Taking in account of all above data and estimates we have to be cautioned about the financial position of the company for the upcoming financial year and a thorough analysis on going concern of the company needed from the company’s annual financial results of 2013.