Pattern of Shareholding
As of December 31, 2021, LOTCHEM has impressive share capital of 1.5 billion shares which are held by 15,254 investors. Associated business, endeavors and associated celebrations form the biggest investors of the business with an ownership over 75 percent shares. This is followed by regional public holding 12.36 percent shares. Modarba and Mutual funds represent 2.09 percent of LOTCHEM’s shareholding. Insurance business own 0.65 percent shares of the business. The staying shares are held by other classifications of investors consisting of Banks, DFIs and NBFIs, NIT and ICP, Directors, CEO, their partner and small kids and so on.
Financial Performance (2018-2022)
There is absolutely nothing that might stop LOTCHEM’s topline from broadening in the last couple of years other than COVID-19, as obvious from the monetary declarations of the business. Since, 2016, the profits of LOTCHEM has actually been increasing other than for a 36 percent year-on-year drop in 2020 – the factor is apparent to all. The slowed down financial activity due to lockdown enforced throughout around the world owing to international pandemic in 2020 took its toll on the PTA need which revealed a down trajectory throughout 2020 with global costs being up to a 20-year low level. Same held true is the domestic market where need arrest triggered the business to close down its plant for over 54 days throughout 2020. Production and sales volumes were likewise 14 percent and 12 percent lower than that in 2019. Gross earnings fell by 67 percent year-on-year with GP margin clocking in at 6.8 percent versus 13 percent in the previous year. Admin and circulation expense likewise grew in line with inflation; nevertheless, other expense fell owing to low employees’ earnings involvement fund on account of low earnings. Other earnings grew on the back of discounting of GIDC arrangement, nevertheless, OP margin dropped from 13 percent in 2019 to 8 percent in 2020. Finance cost substantially dropped throughout 2020 on the back of net exchange gain throughout the year. LOTCHEM’s capital structure is extremely backed by equity with a debt-to-equity ratio of 19:81 in 2020. The bottom line of LOTCHEM plunged by 60 percent year-on-year in 2020 with NP margin clocking in at 5.45 percent as versus 8.9 percent in 2019.
The bad luck that struck LOTCHEM in 2020 showed to be brief as the business made an enormous topline development of 72 percent year-on-year in 2021 with bottom line amplifying by 118 percent. The production and sales volume of 520,047 loads 519,079 loads respectively attained by the business in 2021 were the greatest because the beginning of its operations in 1998. Production and sales volume boasted a year-on-year development of 25 percent and 21 percent respectively. Resurgence in need combined with much better costs in the domestic PTA market led the business attain a GP margin of 11 percent throughout the year. Other expenditures enormously grew throughout the year owing to greater employees’ earnings involvement and employees’ well-being fund on account of higher earnings. Other earnings diminished on account of the loosening up of GIDC arrangement throughout the year. Despite low discount rate throughout the year, financing cost of LOTCHEM grew by over 5 times due to inflated forex loss throughout the year. This in some way watered down the bottom line development which otherwise would’ve grown by much higher percentage. NP for the year stood at 6.9 percent.
2022 was another year of good luck for LOTCHEM as its topline boasted a development of 49 percent year-on-year. Robust need combined with better prices culminated into a GP margin of 17.8 percent, never ever seen by the business previously. Distribution and admin expense followed a general inflationary pattern; nevertheless other expense grew extremely on the back of higher employees’ earnings involvement and well-being fund owing to high revenues throughout the year. Other earnings showed to be thoughtful adequate to grow by 86 percent year-on-year on the back of interest earnings on monetary properties. High discount rate assisted LOTCHEM mint its monetary properties throughout the year. Finance expenses provided an unsightly image and grew by over one hundred percent throughout 2022 on the back of substantial exchange losses sustained by the business throughout the year. Then imposition of incredibly tax likewise munched away a few of the gains. Yet, the business had the ability to bag an NP margin of 10 percent, the greatest ever attained by the business.
Future Outlook
The sales volume of LOTCHEM began coming under pressure throughout 4QCY22 and are anticipated to even more tighten up due to weak need from Textile and family pet sector as stocks of basic materials and completed items have actually accumulated recently due to decrease in export orders from Europe combined with energy crisis in Pakistan which is requiring them to adopt a careful method in capability usage. This combined with lower global PTA costs will restrict the margins of LOTCHEM in 2023. Moreover, cut supply of energies, inflationary pressure and exchange losses owing to sharp devaluation of Pak Rupee will likewise play their due function in reducing the bottomline of LOTCHEM.
