Pachin

2,126 views

Published on

Pachin analysis presentation

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,126
On SlideShare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
52
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Pachin

  1. 1. NATIONAL BANK OF EGYPT PACHIN Profile Paints and chemical industry , Pachin (S.A.E)
  2. 2. Paints and chemical industry , Pachin (S.A.E) <ul><li>PACHIN is the biggest Egyptian company in paints manufacturing , and the oldest, as it has been established in 1958. Since then , we became the leading company in our field , with the biggest sales volume in Egypt in the paints field through our state-of-the-art factory in Elobour city , applying the latest technologies in paints manufacturing . </li></ul><ul><li>Subsidiaries: </li></ul><ul><li>Al Obour for Paints and Chemical Industries: The Company’s object is to establish and operate a factory for the manufacture of paints, printing inks and similar products, animal charcoal and different chemicals related and complementary to these industries, and to manufacture and package all products derived from or related thereto and producing the packaging material used by the Company. </li></ul><ul><li>Pachin Inks: The Company’s object is the production and packaging of printing inks and different products related and complementary to it and other chemicals the related and complimentary products and chemical products and producing the packaging material used by the Company. </li></ul><ul><li>Name </li></ul><ul><li>Paints and chemical industry , Pachin (S.A.E) </li></ul><ul><li>Legal Status </li></ul><ul><li>Egyptian Joint Stock Company </li></ul><ul><li>quoted private company </li></ul><ul><li>Address - Head Office: </li></ul><ul><li>1, Elmassanie Street , Elamiriya , P.O. Box 11887 , Cairo , Egypt </li></ul><ul><li>Telephone: </li></ul><ul><li>+2 (02) 2 282 8980 +2 (02) 2 282 6731 +2 (02) 2 282 1036 </li></ul><ul><li>Fax: +2 (02) 2 284 4473 </li></ul><ul><li>Email: [email_address] </li></ul>The Business Board of Director Company info Position Name Chairman & Managing Director Shreif Mahmoud Shawky Board Member Mr. Magdy Mohamed Said Board member Mr. Fathi Isamil Share holder structure Position Name 39.75% Chemical industry holding 2.2% National bank of Egypt 58% Others
  3. 3. COMPANY PRODUCTS
  4. 4. <ul><li>Paints and chemical industry , Pachin (S.A.E) Products Divided into three types of product. </li></ul><ul><li>Classification of the Painting that the company produce; </li></ul><ul><li>Construction Product. </li></ul><ul><li>Lakee Product </li></ul><ul><li>Plastic painting Product </li></ul><ul><li>Wood Painting Product </li></ul>Paints and chemical industry , Pachin (S.A.E) Products Decorative Paints Industrial Paints Printing inks Products
  5. 5. <ul><li>Risk Analysis </li></ul>Paints and chemical industry , Pachin (S.A.E) <ul><li>Raw materials are divided into three major groups, namely, pigments (titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins and additives. </li></ul><ul><li>Asian Paints is the only paint company that manufactures PAN. The other paint companies have to import their stock. Since PAN prices generally outpace international orthoxylene prices by almost 50% paint companies end up paying a fortune when prices rise. In such a situation Asian Paints benefits by selling PAN in the open market. </li></ul><ul><li>The company operates several subsidaries such as Berger International Limited, Apco Coatings, SCIB Paints and Taubmans. </li></ul><ul><li>High cost and erratic availability of raw materials mark the Indian paint industry. Around 300-400 raw materials are required to manufacture different kinds of paints. The high number of raw materials and finished goods highlights the working capital intensity of the sector. </li></ul><ul><li>Most of the raw materials are petroleum based. Thus paint companies benefit when the petrochemical industry goes into its cyclical downswing. A hike in the price of petroleum products raises input costs negating the impact of a cut in import tariffs on raw materials. </li></ul><ul><li>Raw materials frequently run into short supply, resulting in high inventory cost. The shortage of one specific material could result in severe manufacturing problems It is estimated that 18-20% of the total raw materials used the industry are imported. </li></ul>Supply Risk
  6. 6. Risk Analysis <ul><li>The paint industry is raw material intensive. Paint involves the mixing of various raw materials in various proportions. The raw materials are of a wide variety. On an average, raw materials account for 60% of net sales (industry average). In case of small-scale units it forms up to 70% of the net sales. </li></ul>Paints and chemical industry , Pachin (S.A.E) Production Risk
  7. 7. Risk Analysis Demand Risk <ul><li>Paints and Chemical Industries Company (Pachin) dominated the market, utilising state-subsidies and the exploiting the government's 30% stake in the company (which was privatised in 1997). But since 2003, medium-sized paint companies have been making headway, although Pachin is still the market leader with a 33% market share, producing over 50,000 tonnes of paint a year for Egyptian customers. </li></ul><ul><li>Nonetheless, Pachin is facing strong competition in the market, which is estimated at over 150,000 tonnes of paint manufactured per annum. Newcomers have entered the market from Saudi Arabia, Asia and Turkey, along with new Egyptian companies. &quot;Some are significant investments of $10 million to $15 million,“ </li></ul><ul><li>Multinational paint and coating firms have also entered the market, teaming up with Egyptian manufacturers. El-Mohandes/Jotun, which has expanded from marine paints to architectural paints, has been operating in Egypt for a while now, and marine paint producer Courtalds has partnered with International Paint Egypt. Almost 10,000 Egyptians now work in paint related industries. </li></ul><ul><li>increased competition has led to smaller companies almost vanishing from the market. </li></ul>Paints and chemical industry , Pachin (S.A.E) <ul><li>The company has low collection risk as the company sell cash due to the big market share that the company have </li></ul>Collection Risk
  8. 8. Balance Sheet FINANCIAL DATA             567,428 573,613 557,951 Total liabilities and owners equity   389,134 377,570 371,972 Total Owner's equity   178,143 195,920 185,862 Total liabilities   175,148 193,953 183,448 Total Current liabilities   31,732 33,369 16,837 Account Payable   6,122 29,945 39,603 Bank Overdraft   2006 2005 2004   Liabilities and Owner's equity   567,428 573,613 557,951 Total assets   775 775 775 Investment   200,614 194,305 196,638 Net Fixed Assets   325,604 347,141 326,260 Total Current assets   114,849 151,952 145,585 Total Inventory   33,357 46,029 59,711 Notes receivables   35,314 29,140 27,816 Net Account receivable   60,739 55,926 42,441 Cash   2006 2005 2004       Assets   in thousands Balance Sheet               351,070 347,493 339,450 Total Invested Fund     389,134 377,570 371,972 Total equity     31,732 33,369 16,837 Total Accounts Payable     68,671 75,169 87,527 Total Accounts Receivable     178,143 195,920 185,862 Total Debts     133,994 165,519 161,339 Working Investment     150,456 153,188 142,812 working capital              
  9. 9. FINANCIAL DATA <ul><li>Income Statement </li></ul><ul><li>Sales Revenues </li></ul><ul><li>Net Profit </li></ul>Income Statement 2006 2005 2004 476,882 444,384 393,525 Local Sales 100% 476,882 100% 444,384 100% 393,525 Total Sales 79% 375,397 80% 357,405 80% 313,758 COGS 21% 101,485 20% 86,979 20% 79,767 Gross Profit 0% 187 0% 278 0% 230 salaries and allowances Expenses 4% 20,358 3% 15,311 4% 15,705 G & Admin Expenses 17% 80,940 16% 71,390 16% 63,832 EBIT 1% 2,844 1% 3,622 1% 2,855 Financial Charges 2% 7,455 2% 7,393 2% 8,333 Other revenue 0% 163 0% 1,520 0% 169 Other Expenses 18% 85,388 17% 73,641 18% 69,141 EBT 0% 1,547 0% 0% Tax -1% -2,472 0% 96 0% 129 Capital Gain/loss 81,369 17% 73,737 18% 69,270 NET Profit/loss
  10. 10. Ratio Analysis ROS: represent that each one pound of sales generated in net profit after tax Sales: Increase in sales due to increase in the volume of sales not the price, as the firm can not pass the increase in the price of raw material to the final consumer as there are very high competition in the market. Industry rate represent 70 % in industry but as shown above we determine that the company can not manage cost due to dramatic increase in cost of raw material, that represent each one pound of sales is incurred 0.80 pound in COGS. Paints and chemical industry , Pachin (S.A.E) 21% 19% 18% NET Profit/ Sales 2006 2005 2004 79% 80% 80% COGS/ Sales 2006 2005 2004 7% 13%   Sales Growth Rate 476,882 444,384 393,525 Total Sales 2006 2005 2004
  11. 11. Represent that each pound in sales incurred 0.04 in G&A expenses that the result of increasing in advertising expenses and promotion exp. Of the new segment in Libya. Represent that each one pound in sales is generating 0.17 pound in net operating profit . The reverse ratio of COGS/Sales represent that each pound in sales generating 0.20 pound in gross profit Ratio Analysis Paints and chemical industry , Pachin (S.A.E) 4% 3% 4% G&A Exp / sales   2006 2005 2004     2004 2005 2006     EBIT Margin % 16% 16% 17%   21% 20% 20% Gross Margin %   2006 2005 2004  
  12. 12. <ul><li>Ratio Analysis </li></ul>Paints and chemical industry , Pachin (S.A.E) Working capital is decreased due to of the following : Current assets : Other current assets is increased according to purchasing treasury bills with 46 million EGP. Inventory is declining due to decreasing the permanent level of raw material Current liabilities : short term banking is decreased by 80% in 2006 WI/Sales : represent that each pound in sales the company has to finance 0.28 pound in WI, declining in working investment/ sales due to decline in raw material of inventory.         Financial Ratio     2006 2005 2004 Statement         Liquidity Ratios:     1.9 1.8 1.8 Current Ratio (times)     1.2 1.0 1.0 Acid Test Ratio (times)     0.3 0.3 0.2 Cash Ratio     150,717 153,188 142,812 Net Working Capital (In Thousands)     135,677 165,519 161,339 Working Investment (In Thousands)     28% 37% 41% WI/Sales              
  13. 13. <ul><li>Ratio Analysis </li></ul>Paints and chemical industry , Pachin (S.A.E) Reliance of inventory: We can accept shrinkage in inventory up to 60% shrinkage rate.         Financial Ratio     2006 2005 2004 Statement         Assets utilization,& turn over ratio     3.3 2.4 2.2 inventory Turn over     110 153 167 Inventory DOH     13 15 14 Account Receivable Turn over     28 24 25 Account Receivable DOH     15 13 23 Account Payable Turn over     24 27 15 Account Payable DOH     3.2 3.0 2.8 NWC turnover     1.7 1.7 1.5 Fixed assets turnover     1.5 1.3 1.2 Total Assets Turnover  
  14. 14. <ul><li>Ratio Analysis </li></ul>Paints and chemical industry , Pachin (S.A.E) Leverage : Leverage is declined in 2006 due to declining in short term banking         Financial Ratio     2006 2005 2004 Statement         Long Term solvency or financial leverage Ratio     31% 34% 33% Total debt ratio     46% 52% 50% debt Equity ratio  
  15. 15. <ul><li>Ratio Analysis </li></ul>Paints and chemical industry , Pachin (S.A.E)         Financial Ratio     2006 2005 2004 Statement         Profitability Ratios:         21% 20% 20% Gross Profit Margin ( %)     81,369 73,737 69,270 Net Income (In thousands)     17% 17% 18% Net Income Margin (%)     14% 13% 12% Return on Total Assets (%)     21% 20% 19% Return on Equity (%)              
  16. 16. Capital Structure Paints and chemical industry , Pachin (S.A.E) Working Capital Adequacy 55,675 68,894 65,785 Total Permanent Fund 78,319 96,625 95,554 Bank Overdraft Desired 150,456 153,188 142,812 working capital 6,122 29,945 39,603 Bank Overdraft Actual 55,675 68,894 65,785 Total Permanent Fund 26,799 33,104 32,268 WI permanent level       28,876 35,790 33,517 Shrinkage 22,970 30,390 29,117 inventory 5,906 5,400 4,400 A/R Capital structure 37.3% 33.8% 33.5% WC adequacy after shrinkage -9% -10% -10% Shrinkage in WC 296,728 311,351 292,743 CA After Shrinkage 46.2% 44.1% 43.8% WC adequacy
  17. 17. Working investment 161,339 Permanent Fund 55,675 STB 78,319 Equity 28,876 LTD 26,799 Paints and chemical industry , Pachin (S.A.E) Capital Structure Actual Working investment 161,339 Working Capital 150,452 STB 6,122 Desired

×