By Ismat Sabir.

Pak Elektron Limited (PEL) is one of the pioneer manufacturers of electrical goods in Pakistan. PEL is also one of the major electrical equipment suppliers to WAPDA and KESC. The gross sales of PEL are estimated at Rs. 13.07 billion and profit after tax of Rs. 582 million has shown an increase of 18.42 percent and 31.67 percent respectively during the period ending June 30, 2007.

The company has announced a dividend, bonus shares of 25 percent as its earnings per share stood at Rs 6.87 during 2007 (2006 : 5.04).

Growth in sales and profit after tax in FY07 were 26 percent and 32 percent respectively. The overall profit margin was slightly higher than the year 2006, due to higher net profit. The current ratio increased since 2003 onwards, except a slight decrease from 0.69 to 0.61 in 2006.

The Company has achieved more than 25 percent growth for the sixth consecutive year. During FY07, gross sales rose to Rs13.077 billion from Rs11.042 billion in the last year, with Rs8.075 billion, Rs.077 billion and 3.983 billion in FY05, FY04 and FY03 respectively.

It seemed that company's current liabilities, mainly due to higher trade payables and short term borrowings, were rising far more than its current assets, depicting a decline in the company's ability to repay its short term loans. But contrast to this belief the financial results of FY07 proved the positive trend of reduction in current liabilities.

PEL designs and builds a full line of products serving all three principal markets i.e., government, private industry and direct consumers. Share of revenue from power and appliances, were about equal.

The company's principal activity is manufacturing and sale of electrical capital goods and domestic appliances that comprises two divisions:

Appliances division
This division is producing airconditioners, refrigerators and deep freezers, microwave ovens, colour televisions and washing machines. Like the airconditioner, PEL's refrigerators are very popular and in great demand.

Appliances business is growing fast in volumes and this business is becoming different because a number of new entrants representing foreign products and brands are entering this area.

As a policy of widening the range of its products in appliances division which is intended to provide a complete range of home appliances to its customers, company added mini refrigerators, diesel generators and geysers to its range during the year 2006-07 and all of these products were well received in the market.

Power Division
Power division produces energy meters, transformers, switch gears, kiosks, compact stations, shunt capacitor etc. Electrical equipments are used in numerous power projects of national importance in Pakistan.

Power business has the highest growth potential for PEL within and outside the country.
PEL was established in 1956 in technical collaboration with AEG of Germany. After 22 years of successful operations the company was bought by the Saigol Group of Companies, under the name of Kohinoor Industries Limited, in October 1978.

Although there is tough competition in the market, among local and multinational brands, but PEL brand appliances and electrical equipments have remained in the spotlight due to constant innovation and confidence of buyers.

Financial performance.
The sales and equity remained flat in FY07 because of greater increase in total equity base than in sales. PEL's greater reliance was on debt financing rather than equity financing. Also the proportionate increase in long term liabilities is greater than the modest increase in the equity base, evident in the long term debt to equity ratio.

The company is listed on all the three stock exchanges of Pakistan. PEL's EPS and market price of its share comparison shows the formance with KSE 100 index, it outperformed the index till FY05 but later the trend was erratic.

Initially PEL's book value per share was very high but since 2004 onwards, the company's book value per share nose dived on account of nearly 5 times increase in the number of shares compared to only a modest increase in total equity. It has now shown a consistent growth in recent years

The prospects of power division looks bright with increased focus of the government on power projects, resulting into higher demand for PEL's products by WAPDA and its distribution companies coupled with private sector clients like KESC. PEL would benefit from this demand accordingly to its market share.

ISO 9001 certification
PEL was 16th company in Pakistan which got ISO 9002 Certification in 1997. The international standard practices in PEL have been upgraded as per the revised ISO 9001 standards and its scope of application is expanding ever since and top management is committed to make PEL a total quality management (TQM) company.

Group profile
In 1948, the Saigols migrated from Calcutta and initiated their business in Lyallpur (later named to as Faisalabad), the textile city of Pakistan, under the banner of Kohinoor Industries Limited. Pak Elektron Limited (PEL) In 1978, the Saigol Group of Companies purchased major shares of Pak Elektron Limited, which expanded its product range by entering into airconditioner manufacturing.

Saritow Spinning Mills & Azam Textile Mills
In 1987, the Saritow Spinning Mills and Azam Textile Mills were established under the banner of Saigol Group of Companies. Saritow Spinning Mills is a spinning unit with 25,440 spindles capacity. Facilitated with the most modern and efficient Japanese and European machinery, its knitted yarn is renowned in the Far East and Europe for its fine quality.

Kohinoor Power Company Limited
In 1991, the first power unit commissioned in Pakistan, in the Private sector, namely Kohinoor Power Company Limited. Its present production capacity is 15 MW.

Kohinoor Energy Limited
1995, another power unit, Kohinoor Energy Limited, was established. Kohinoor Power Limited is a 120 MW power plant located on the outskirts of the city of Lahore. This project has an annual turnover of $80 million.

PEL make oil immersed transformers with natural cooling are suitable for both indoor and outdoor installation. These transformers are manufactured according to BSS-171, IEC-76 or VDE-0532 tropicalised for suitable operation in Pakistan, Middle East and the Africa.

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