KARACHI, Oct 19 (Focus Pakistan) — KSB Pumps Company Limited more than doubled its quarterly sales, yet a Rs250 million impairment loss and a tax charge nearly three times last year’s held net profit growth to 15 percent, the pump and valve maker told the Pakistan Stock Exchange on Monday.
The board approved unaudited accounts for the quarter ended Sept 30. It announced no interim dividend, bonus or rights issue.
Sales reached Rs3.02 billion in July-September. A year ago the figure stood at Rs1.46 billion, so KSB more than doubled its sales in twelve months. Gross profit did even better, rising 135 percent to Rs755 million, and the margin crept up to 25 percent from 22.1 percent.
The second half reads differently.
KSB booked a net impairment loss of Rs250 million on financial assets in the quarter. A year ago, the same line showed Rs6.7 million. The filing offers no explanation for the charge.
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Overheads swelled too. Distribution and marketing costs rose 82 percent to Rs191.5 million. Administration expenses grew 87 percent to Rs189.8 million. Operating profit ended the quarter at Rs142.8 million — just 9.7 percent above last year’s Rs130.2 million, despite the doubling at the top line.
Then came tax. KSB set aside Rs88.4 million in current tax for the quarter, against only Rs328,000 a year earlier, when it recorded a Rs17.9 million minimum tax levy instead. A Rs45.1 million deferred tax credit softened the blow, bringing the quarter’s total tax and levy charge to Rs41.7 million, up from Rs15.5 million. That left Rs105.4 million for shareholders, or Rs3.41 a share. The same three months last year delivered Rs91.8 million and Rs2.97.
Nine months: the gap widens
The pattern holds across the first nine months of KSB’s calendar financial year. Sales rose 54 percent to Rs7.33 billion. Profit before levy and taxation climbed 45 percent to Rs384.4 million.
Profit growth lagged far behind sales. KSB made Rs276.9 million after tax, roughly 13 percent more than last year, and each share earned Rs8.96 against Rs7.94.
Two lines account for most of that gap. Start with impairments. KSB has now taken Rs327.9 million in such losses this year, about four times last year’s Rs81.9 million. Taxation added further pressure. The current tax charge hit Rs149 million. Last year it came to just Rs2.8 million, because the company recorded a Rs56.9 million minimum tax levy in its place.
Customers owe more. Cash still flows.
Trade receivables climbed 29.5 percent. Customers owed KSB Rs2.16 billion at the end of September, almost Rs500 million more than in December.
Cash moved the right way all the same. Operations brought in Rs489.5 million over nine months. Last year they drained Rs125.8 million. Cash and bank balances reached Rs627.9 million at the end of September, up from Rs394.6 million in December.
The balance sheet shows no short-term or long-term financing outstanding. Spending on plant picked up instead. KSB put Rs311.6 million into fixed assets this year, up 77 percent, and property, plant and equipment now stands at Rs1.18 billion. Shareholders’ equity reached Rs4.43 billion.
Inventory eased 5.3 percent to Rs3.46 billion. Trade payables fell to Rs3.69 billion from Rs4.03 billion.
A 67-year-old player in a thin field
The German KSB group chose Pakistan for its first Asian subsidiary in 1959, and the company joined the stock exchange in 1971. Its factory sits in Hassanabdal, Punjab, foundry included. The parent, KSB SE & Co. KGaA, counts as one of the world’s big names in pumps and valves.
Its pumps work in city water and sewage networks, power plants, oil and gas fields, chemical units, mines, factories and high-rise buildings. In its latest rating report, PACRA calls KSB the country’s foremost maker of industrial pumps and valves, operating in a specialised field with few local rivals.
