Oil & Gas Marketing Companies: SHELL GAS LPG (PAKISTAN) LIMITED - Year Ended 30-06-2006
OVERVIEW (October 13 2006): During the year under review, the LPG industry has faced new challenges of the impact of rising oil prices and increased transportation cost, increase in marketing and d istribution expenses. Increase in competition has accelerated through new entrants. The number of LPG marketeers has increased from around 15 in 2000 to 42 in 2006. On the other hand, new opportunities have been unfolded through the ne w automotive segment opening up for LPG. The company's sales improved by 67.8% as compared to the previous year's. The increase in turnover was primarily due to increase in volumes, which grew by 46% as compared to last year's and better price management. Apart from seasonal variations, the average se lling price of the product had risen steadily over the year. But the company posted wafer thin net profit after taxation of Rs 0.79 million as compared to Rs 75.21 million in the preceding year. The company skipped dividend for the year reasoning that cash generated through business should be ploughed back to sustain the growth initiative of the company. The lower profitability was due to higher cost of goods sold, import cost of product. Administrative expense increased by 32% as the company moved to independent premises and hired additional staff. Finance cost and freight charges also increased. Shell Gas LPG (Pakistan) Ltd is a public limited company incorporated in Pakistan. Its registered office is situated at Suite No 606-608, 6th Floor, The Forum Block-9 Clifton Karachi. It was listed on the Karachi Stock Exchange in 1982 and its shares are also quoted on the Lahore and Islamabad stock exchanges. The principal activity of the company is s toring and marketing Liquefied Petroleum Gas (LPG) throughout Pakistan. As regards ownership of its equity, The Shell Petroleum Company Ltd, United Kingdom, a subsidiary of Royal Dutch Shell Plc held 1,815,958 shares of the company which works out to 67.38 percent of its stock. Its 355 individual shareholders owned 15.08% and National Bank of Pakistan Trustee Deptt held 13.79% of its stock. Remaining shares were held by other institutional investors. The Shell Gas LPG (Pakistan) Ltd shares are considered blue chips as such invariably carry very high premium. On October 2, 2006, the closing m arket price of the share was quoted at Rs 237.10 per share which is nearly 24 times of the par value. The market value of the share during the last 52 weeks remain between Rs 237.10 and Rs 346.50 per share. During the year under review, the company continued to achieve higher financial and operating results. The achievements were apace with the expansion in the economy. The recovery of Pakistani economy has been strong and fast despite rising oil prices. Growing economy attracted new competitors in the LPG industry and at same time rising oil prices led to higher international prices of LPG. The Annual Report of the company brought the scenario of increasing competition in LPG industry and rising cost of product and transportation in sharp focus. Even then the company achieved commendable increase in volume sales, turnover and made substantial investment in property, plant, and equipment gas cylinders. The company's vision encompasses its commitment and aspirations in multidirection of providing quality service, actively pursue consistent safety improvements, develop people, harness the power of information technology to increase the avenues of informed decision making. Above all it has done wonderful job in the field of corporate social responsibility which has been exemplified through its activities to support the earthquake victims. During the year the company posted net sales at Rs 1.456 billion as compared to Rs 0.868 billion posted in the preceding year registering 67.8% growth. It may be mentioned here that the company has maintained its market leadership despite formidable challenges from increase in number of competitors. On the other hand availability of indigenous LPG remained an issue with the increase in number of players. Furthermore, the rise in oil prices has impacted cost of imported LPG making it an expensive proposition at
the current level of pricing. This seems to pose challenge in the growth of LPG industry. But at the same time the new automotive segment has great potential for opening for LPG industry. The company through its continued capital expenditure, improved efficiency and customer relationship management has set its target to remain m arket leader.
Performance Statistics (Million Rupees) =========================================================== 30th June 2006 2005 =========================================================== Share Capital-Paid-up: 26.95 26.95 Reserves & Surplus: 208.53 221.21 Shareholders Equity: 235.48 248.16 Deferred Taxation: 5.42 4.81 Cylinder & Regulator Deposits: 380.53 309.19 Current Liabilities: 298.62 161.41 Fixed Assets: 498.04 370.94 Intangible Assets: 42.43 47.43 L.T. Investment: L.T. Loans: 4.02 2.78 L.T. Deposits: 41.42 52.12 Current Assets: 334.14 250.30 Total Assets: 920.05 723.57 ----------------------------------------------------------Sales, Profit & Pay Out ----------------------------------------------------------Net Sales: 1,456.51 867.86 Gross Profit: 204.35 192.35 Other Operating Income: 45.55 53.89 Operating Profit: 32.80 108.61 Finance (Costs): (14.38) (1.53) (Depreciation): (63.61) (46.72) Profit Before Taxation: 18.42 107.08 Profit After Taxation: 0.79 75.21 Dividend Per Share (Rs): 7.00 Earnings Per Share (Rs): 0.29 27.91 Share Price (Rs) on 02/10/06: 237.10 ----------------------------------------------------------Financial Ratios ----------------------------------------------------------Price/Earning Ratio: 817.59 Book Value Per Share: 87.38 92.08 Price/Book Value Ratio: 2.71 Debt/Equity Ratio: 0:100 0:100 Current Ratio: 1.13 1.55 Asset Turnover Ratio: 1.58 1.20 Days Receivables: 4 4 Days Inventory: 5 6
Gross Profit Margin (%): Net Profit Margin (%): R.O.A. (%): R.O.C.E. (%):
14.03 22.16 0.05 8.67 0.09 10.39 0.13 13.38
COMPANY INFORMATION: Chairman: Quentin D'Silva; Chief Executive: Fawzia Kazmi; Company Secretary: Sameer Amin; Registered Office: Suite No 606-608 6th Floor The Forum Block-9 Clifton Karachi; Website: Not Reported.
