BCL About the Company:
Company Overview: Bolan Casting was incorporated in early 1980s as a public listed com-pany by Pakistan Automobile Corporation Limited (PACO) under the administrative control of Ministry of Production and was later privatized in 1993. The Company has a modern foundry at Hub to produce automotive casting. It also has facilities of duplex melting, high pressure molding, sand preparation and shell core making, new sand pre-conditioning, shot blasting, fettling, heat treatment and necessary metallurgical treatment. Main products of the company are: cylinder block, transmission case, center housing etc. Major customers of the company include: Millat Tractors, Al Ghazi tractors, Ghandara Nissan, etc.
9MFY15 Result review: FY14 remained one of the poorest years for BCL as far as financial
performance is concerned, the company posted a net loss of PkR105.5mn (LPS: PkR9.2) vs.
net earnings of PkR22.2mn (EPS: PkR1.94) in FY13, primarily because of Millat Tractors
(largest customer, constituting ~90% of the total sales) curtailing its purchases, following
reduction in tractor demand, owing to imposition of higher GST on sale of tractors. That said,
reduction in sales tax on tractors from 17% to 10% in FY14?15 budget allowed BCL’s top?line
to exhibit a massive growth of 85%YoY during 9MFY15 to reach PkR1.36bn. With cost of sales
increasing at a slower pace, GMs of the company went up from gross loss in 9MFY14 to
13.4% in 9MFY15. Additionally, the company witnessed a downfall of 27%YoY in its borrow?
ing cost on the back of continuous monetary easing by the Central bank amid deleverag?
ing. Resultantly, the company posted a bottom?line of PkR59.0mn (EPS: PkR 5.14) in 9MFY15
vs. a net loss of PkR117.5mn (LPS: PkR10.24) in 9MFY14. Recovery was also evident on a se?
quential basis where the company’s bottom?line posted earnings of PkR25.9mn (EPS:
PkR2.26) against a loss of PkR 56.4mn (LPS: PkR4.92) in the corresponding period last year.
Has anyone seen the results of BCL (Bolan Castings Limited). The company has gone thru an entire turnaround.
It is owned by the Millat group. The company manufactures castings for Tractor companies primarily for Millat.
I see that in 9MFY15 the company posted an EPS of Rs 5.2/share ( in 3Q the EPS was 2.26/share vs a loss 4.9/share last year in same period in 3QFY14) while last year in 9MFY14 company posted a loss of 10.2/share. Last year the company posted a loss of Rs 9.2/share for full FY14. This would be a substantial turn around I believe.
I also see that pig iron prices are declining which is the major raw material along with lower electricity cost and the company could also book substantial electricity savings due to Fuel Surcharge adjustment for this and next quarter.
Does anyone have a view on this company? Moreover in Pakistan last 2 quarters usually depict a rise in tractor sales and hence the company's profitability could go higher.