Packages Limited’s financial results for the half year ended 30 June 2011

Karachi: The Board of Directors of Packages Limited (PKGS) in their Meeting held yesterday at 11.30 Lahore gave their permission for the release and placing on the Company’s website ( the unaudited condensed interim financial information in respect of the above captioned period.

The Directors’ Report to the Shareholders is annexed herewith as Annexure ‘A’ and the financial results of the Company are as follows:-


Quarter ended

Half year ended

June 30,


June 30,


June 30,


June 30,


(Rupees in thousand)

(Rupees in thousand)

Local sales  5,780,288 5,199,619 11,915,387 10,700,086
Export sales  45,874 341,997 130,644 741,341
——— ——— ———- ———-
5,826,162  5,541,616 12,046,031 11,441,427
Less: Sales tax and excise duty 1,022,399 812,921 2,046,314 1,659,877
Commission 4,861 10,761 9,620 20,397
———  ———  ———-  ———-
1,027,260  823,682  2,054,934  1,680,274
 ——— ———   ———-  ———-
4,798,902  4,717,934 9,991,097 9,761,453
Cost of sales (4,738,067)  (4,425,508) (9,507,725) (9,117,235)
———  ——— ———- ———-
Gross profit  60,835 292,426 483,372 643,918
Administrative expenses (183,831)  (138,419)  (323,081) (260,384)
Distribution and marketing costs (143,956)  (152,265)  (285,752) (300,062)
Projects expenditure (45,166)  (49,487)
Other operating expenses  19,999  15,040  (12,220)  (26,983)
Other operating income 181,439 66,586  217,983 111,209
———  ——— ———- ———-
(Loss)/profit from operations  (110,680) 83,368  30,815 167,698
Finance costs (399,060)  (296,093)  (749,771) (595,878)
Investment income 59,722 40,066  702,215 789,935
——— ——— ———- ———-
(Loss)/profit before taxation  (450,018)  (172,659)  (16,741) 361,755
Taxation  114,786 131,000 (192,214)  (83,000)
———   ——— ———- ———-
(Loss)/profit after taxation  (335,232)  (41,659) (208,955) 278,755
——— ——— ———- ———-
(Loss)/earnings per share
– basic   Rupees  (3.97)  (0.49)  (2.48) 3.30
– diluted Rupees (3.97) (0.49) (2.48)  3.30



Three hundred copies of the unaudited condensed interim financial information will be sent to you shortly for distribution amongst the Members of the Exchange. Additionally, the half yearly financial results shall also be e-mailed to the Exchange by this evening at in Portable Document Format (PDF) to enable the Exchange to place the same on its website.

Annexure ‘A’

Directors’ Report for the Half Year Ended June 30, 2011

The Directors of Packages Limited are pleased to submit to its shareholders, the six monthly report along with the condensed interim un-audited financial statements of the Company for the half year ended June 30. 2011.

Financial and Operational Performance

The comparison of the un-audited results for the half year ended June 30, 2011 as against June 30, 2010 is as follows:


For the second quarter


Apr – June

Apr – June

Jan –June






Financial – Rupees in million
Net sales-local  4,753 4,376 9,860 9,020
Net sales- export 46 342 131 741
EBITDA- operations 89 386 604 848
Depreciation and amortization (401)  (383)  (779)  (764)
EBIT-operations  (312)  3  (175) 84
Finance costs (399) (296)  (750) (596)
Other operating income/ (expenses) – net 201 80  206 117
Investment income 60 40 702 757
(Loss)/Earnings before tax (450)  (173) (17) 362
Taxation 115 131 (192)  (83)
(Loss)/Earnings after tax (335)  (42)  (209)  279
(Loss)/Earnings per share – rupees (3.97)  (0.49) (2.48)  3.30


During the first half of the year 2011, your Company achieved local sales of Rs 9,860 million indicating 9% growth over corresponding values of 2010. The EBITDA of the Company declined by Rs. 244 million during the first half of 2011 over corresponding values of 2010 due to the following reasons:

Planned shutdown of Paper Machine – 6 (PM 6) for capacity expansion and during the first half of 2011.

Energy shortages due to non-availability of gas and resultant usage of high cost furnace oil. Also operational issues faced at boiler.

Unprecedented rise in international pulp prices and local waste paper. (OCC) which is used as raw material.

Significantly reduced supply of liquid packaging board during this period due to up-gradation of PM 6.

The above reasons adversely impacted our paper and board operations but as the mentioned in paragraph below our packaging operations have continued to perform well.

In the future we expect the paper and board operations to improve as the rise in international pulp prices and local OCC prices have shown a reversal. The energy shortages are being addressed by exploring alternate energy options which is at an advanced stage.

A review of the operations of different business units is as follows:

Packaging Operations.

The Packaging operations have registered external sales of Rs 6,775 million during the first half of 2011 as compared to Rs 4,759 million of the corresponding period of last year achieving sales growth of 42% with an EBITDA growth of Rs 379 million. This segment of the Company continues to strengthen due to a number of factors including growing consumer industry, customer focused marketing and production methodology, focus on internal efficiencies and better product mix.

Consumer Products.

The Consumer Products Division has recorded external sales of Rs 1,097 million during the first six months of 2011 as compared to Rs 916 million for the corresponding period thus indicating a sales growth of approximately 20%. This continuous sales growth is indicative of the Division’s ability to increase its market diversification.

Paper and Board Operations

During the first half of the year 2011, external sales of Paper and Board Operations dropped by 1,911 million over corresponding values of 2010 due to a number of factors including planned shut down of Brown Paper Machine (PM-6) for capacity expansion, energy shortages and unfair competition faced by writing and printing paper from imported paper that is being sold at dumping prices in the local market.

Paper Machine (PM-6) rebuild project has been completed on time and the machine has started commercial operations with enhanced capability of producing high value added liquid packaging and bleached board. This was partially financed by a long term loan facility of Rs 1,000 million. Applications for fixation of regulatory duty and ITP have been filed with National Tariff Commission (NTC) and the custom authorities. However our request has been met only partially.

Production Statistics

The production statistics for the period under review along with its comparison with the corresponding period are as follows:


April – June

January – June





Paper and paper board produced-tons 49,975 46,315 84,386 89,709
Paper and paper board converted-tons 38,447 25,065  68,511 50,857
Plastics all sorts convened-tons 4,421 2,871 7,503 5,503


Future Outlook

In view of rising raw material prices, electricity and gas shortages, your Company will continue to focus on improving shareholder’s value through tight cost control, product and process optimization, price rationalization and efficient working capital management. The price of  local waste paper has stabilized and international pulp prices have also come down by average 15%. The growth rate remains strong and we remain confident that economic prospects will improve, in the future and the Company shall be able to maintain its market leadership.

New Asset Class

Most of the paper and board manufacturing operations have been relocated from Lahore to Bulleh Shah Paper Mills Kasur leaving considerable land at Lahore site available for alternative us. Your Company is considering various possibilities for development thereof directly or through subsidiaries which would create shareholders value.

Election of Board of Directors

During the current year, fresh election of the Board of Directors of the Company were conducted during the Board meeting held on May 20, 2011 in pursuance of the requirements of listing regulations and the entire Board has been re-elected for the next term of three years effective May 26, 2011.

Mr. Towfiq Habib Chinoy has been re-appointed as the Chairman of the Board of Directors and Syed Hyder Ali will continue to hold the office of Chief Executive Officer of the Company for the next term of three years commencing May 26, 2011 in accordance with Company’s policies and rules of service.

The Board wishes to place on record its appreciation of the services rendered by its members during their last term and expect them to continue providing the same valuable guidance and making positive contribution in future.

Company’s Staff and Customers

As we continue with our mission, we would like to record our appreciation of continued patronage of our valued customers and sustained efforts of our employees.


For more information, contact:
(Towfiq Habib Chinoy) Chairman
Packages Limited
P.O. Amer Sidhu,
Lahore- 54760, Pakistan
Ph: 35811541-46
Fax: (042) 35811195

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