Financial Statement Analysis - HUM TV

1. HumNetworkLimited
FinancialStatementAnalysis

2. Shareholding Pattern - HUM Network Limited
Categories of Shareholders Percentage
Directors and their spouse(s) and minor children 31.37%
Associated Companies, undertakings and related parties 25.86%
Insurance companies, takaful, modarabas and pension funds 2.48%
Mutual Funds 0.20%
General Public 8.62%
Foreign Companies 28.84%
Others 2.63%
Total 100.00%
Pattern of shareholding of HUM Network Limited (as on June 30, 2016) is as follows:
Shareholding Pattern

3. Common Size and Comparative Analysis

4. 2016 2015 2014 2013 2012
---------- Rupees
Revenue 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of production -57.34% -46.82% -47.09% -51.78% -56.36%
Transmission cost -5.55% -4.11% -4.76% -4.20% -6.39%
-62.89% -50.93% -51.84% -55.99% -62.75%
Gross profit 37.11% 49.07% 48.16% 44.01% 37.25%
Distribution costs -9.84% -12.23% -11.91% -10.63% -11.34%
Administrative expenses -11.79% -11.62% -12.03% -11.33% -11.29%
Other income 2.85% 3.04% 3.37% 2.85% 2.48%
Finance costs -0.95% -0.61% -0.28% -0.32% -1.86%
Other expenses -0.30% -0.76% -0.81% -0.50% -0.31%
Profit before taxation 17.07% 26.88% 26.50% 24.09% 14.94%
Taxation -5.57% -7.83% -7.42% -7.55% -3.78%
Profit after taxation 11.51% 19.04% 19.07% 16.54% 11.16%
Income Sheet 2012-2016
Common Size – Income statement

5. 2016 2015 2014 2013 2012
Property, plant and equipment 8.24% 9.48% 11.20% 12.80% 11.15%
Intangible assets 1.78% 1.72% 1.81% 0.62% 0.73%
Long-term deposits 1.58% 1.13% 1.13% 1.46% 1.46%
Television program costs 14.55% 15.62% 12.88% 10.82% 16.94%
Deferred tax asset 2.90% 1.71% 0.20% 0.31% 1.72%
Total Non-Current Assets 29.05% 29.66% 27.23% 26.00% 32.00%
Inventories 0.16% 0.16% 0.31% 0.05% 0.03%
Current portion of television program costs 14.87% 18.73% 15.81% 15.90% 22.24%
Trade debts 46.86% 39.48% 40.98% 37.64% 28.75%
Advances 5.71% 8.64% 7.54% 3.91% 3.07%
Trade deposits and short-term prepayments 1.32% 1.25% 1.25% 0.51% 0.34%
Accrued profit 0.04%
Other receivables 0.57% 1.13% 0.64% 0.44% 0.25%
Taxation - net 0.00% 0.00% 2.78% 5.03%
Cash and bank balances 1.54% 0.95% 6.25% 12.77% 8.23%
Total Current Assets 70.95% 70.34% 72.77% 74.00% 68.00%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%
Issued, subscribed and paid-up capital 28.93% 33.94% 48.99% 27.43% 30.14%
Reserves 30.40% 24.11% 21.37% 52.27% 37.20%
Total Equity 59.33% 58.04% 70.36% 79.69% 67.34%
Liabilities against assets subject to finance lease 0.83% 1.43% 0.14% 0.09% 0.07%
Deferred Liabiliites 0.00% 0.00% 0.00% 0.00% 4.72%
Total Non-Current Liabilities 0.83% 1.43% 0.14% 0.09% 4.79%
Trade and other payables 21.41% 25.16% 28.81% 20.04% 16.17%
Accrued mark-up 0.27% 0.22% 0.05% 0.00% 0.38%
Short term borrowings 14.51% 10.76% 0.00% 0.00% 11.24%
Unclaimed dividend 0.18% 0.19% 0.22% 0.08% 0.00%
Taxation - net 2.76% 3.54% 0.33% 0.00% 0.00%
Current portion of liabilities against assets subject to finance lease0.71% 0.67% 0.08% 0.10% 0.08%
Total Current Liabilities 39.84% 40.52% 29.50% 20.22% 27.87%
Total Liabilities 40.67% 41.96% 29.64% 20.31% 32.66%
Total Equity and Liabilities 100.00% 100.00% 100.00% 100.00% 100.00%
Current Assets
Non-Current Asset
Current Liabilities
Non-Current Liabilities
Common Size – Balance Sheet

6. 2016 2015 2014 2013 2012
Cash Flow From Operating Activities
Cash generated from operations 99.07% 83.95% 96.58% 84.76% 89.13%
Taxes paid -57.49% -35.84% -19.06% -19.56% -29.49%
Finance costs paid -7.42% -2.64% -0.86% -2.16% -8.74%
Profit received on deposit accounts 0.56% 0.88% 2.11% 1.99% 1.66%
Gratuity paid -12.32% -0.42%
Long term deposits -3.97% -1.36% 0.56% -0.37% -0.64%
Television program costs -7.99% -26.53% -6.15% 13.05% 6.90%
Net cash generated from operating activities 22.77% 18.47% 73.18% 65.40% 58.40%
Cash flow generated from investing activities
Purchase of property, plant and equipment -15.46% -21.72% -3.78% -4.63% -6.33%
Adiition to capital work in progress -2.74% -8.97% -1.39%
Addition to intangible assets -3.23% -0.82% -2.98% -0.23% -0.30%
Acquisition of subsidiary 0.16%
Proceeds from the disposal of operating fixed assets 0.37% 2.12% 0.63% 0.20% 2.31%
Net cash used in investing activities -18.32% -20.26% -8.87% -13.63% -5.71%
Cash flow generated from financing activities
Liabilities against assets subject to finance lease -1.67% 12.89% 0.11% -0.25% -4.70%
Dividends paid -32.52% -67.11% -77.89% -7.54% -25.24%
Net cash used in financing activities -34.19% -54.22% -77.78% -7.79% -29.93%
Net decrease/ increase in cash and cash equivalents -29.75% -56.01% -13.47% 43.98% 22.75%
Cash and cash equivalents at beginning of the year -53.97% 17.15% 27.93% -7.77% -35.06%
Cash and cash equivalents at end of the year -83.71% -38.86% 14.46% 36.21% -12.31%
Total inflows 100.00% 100.00% 100.00% 100.00% 100.00%
Total inflows (In numbers) 506,036,978 702,734,000 833,197,456 642,755,794 405,612,854
Common Size – Cash Flow

7. Comparative Study – Income Statement
2016 % Change 2015 % Change 2014 % Change 2013 % Change 2012
---------- Rupees
Revenue 4,229,262,636 9.8 3,851,077,386 31.3 2,933,796,736 26.0 2,328,234,233 33.1 1,748,721,451
Cost of production (2,425,163,065) 34.5 (1,803,228,927) 30.5 (1,381,432,771) 14.6 (1,205,632,497) 22.3 -985,565,273
Transmission cost (234,793,351) 48.4 (158,170,761) 13.3 (139,562,851) 42.6 (97,890,383) (12.4) -111,695,996
(2,659,956,416) 35.6 (1,961,399,688) 29.0 (1,520,995,622) 16.7 (1,303,522,880) 18.8 -1,097,261,269
Gross profit 1,569,306,220 (17.0) 1,889,677,698 33.8 1,412,801,114 37.9 1,024,711,353 57.3 651,460,182
Distribution costs (416,061,314) (11.7) (471,036,714) 34.8 (349,373,150) 41.1 (247,596,037) 24.8 -198,328,899
Administrative expenses (498,576,111) 11.4 (447,649,525) 26.8 (353,024,584) 33.9 (263,684,378) 33.5 -197,448,587
Other income 120,414,176 3.0 116,942,301 18.4 98,805,818 48.7 66,433,595 53.1 43,392,713
Finance costs (40,202,997) 69.9 (23,665,532) 192.5 (8,090,957) 7.7 (7,509,902) (76.9) -32,545,855
Other expenses (12,852,677) (29,172,732) (23,761,981) (11,535,474) -5,353,859
Profit before taxation 722,027,297 (30.2) 1,035,095,496 33.2 777,356,260 38.6 560,819,157 114.7 261,175,695
Taxation (235,417,127) (22.0) (301,670,202) 38.5 (217,751,752) 23.8 (175,823,523) 166.1 -66,070,625
Profit after taxation 486,610,170 (33.7) 733,425,294 31.1 559,604,508 45.4 384,995,634 97.3 195,105,070
Earnings per share - basic and diluted 0.51 (34.6) 0.78 (86.8) 5.92 (23.1) 7.70 97.4 3.90

8. Comparative Study Balance Sheet
2016 % Change 2015 % Change 2014 % Change 2013 % Change 2012 2011
Property, plant and equipment 269,132,578 1.9 264,079,326 22.2 216,066,054 (7.4) 233,302,670 26.1 184,974,649 199,568,794
Intangible assets 58,144,964 21.3 47,951,207 37.4 34,910,121 210.9 11,228,355 (6.6) 12,027,001 12,846,305
Long-term deposits 51,684,160 63.7 31,575,692 44.4 21,861,356 (17.7) 26,552,369 9.9 24,170,381 22,478,071
Television program costs 475,255,121 9.3 434,836,050 75.0 248,419,271 26.0 197,195,117 (29.8) 281,055,788 309,054,278
Deferred tax asset 94,782,461 99.2 47,583,838 1,106.2 3,945,022 (31.1) 5,725,778 (80.0) 28,613,561 16,320,930
Total Non-Current Assets 948,999,284 14.9 826,026,113 57.3 525,201,824 10.8 474,004,289 (10.7) 530,841,380 560,268,378
Inventories 2,225,966 (50.3) 4,479,117 (24.8) 5,956,137 566.3 893,927 56.7 570,580 252,652
Current portion of television program costs 485,809,664 (6.8) 521,455,464 71.1 304,853,048 5.2 289,858,307 (21.4) 368,979,393 396,767,617
Trade debts 1,530,579,492 39.2 1,099,372,556 39.1 790,405,463 15.2 686,257,871 43.9 476,949,088 468,324,289
Advances 186,571,745 (22.5) 240,649,168 65.5 145,433,634 104.1 71,266,218 39.8 50,975,068 27,279,121
Trade deposits and short-term prepayments 43,278,543 24.3 34,806,311 44.4 24,102,692 159.3 9,296,070 62.7 5,715,166 4,701,556
Accrued profit 725,247 227,964
Other receivables 18,490,488 (41.1) 31,367,863 154.4 12,331,622 53.3 8,046,312 93.5 4,158,684 1,693,364
Taxation - net 50,711,832 83,422,421 47,171,235
Cash and bank balances 50,367,783 90.4 26,450,936 (78.1) 120,518,338 (48.2) 232,725,438 70.6 136,440,625 89,153,544
Total Current Assets 2,317,323,681 18.3 1,958,581,415 39.5 1,403,600,934 4.0 1,349,055,975 19.6 1,127,936,272 1,035,571,342
Total Assets 3,266,322,965 17.3 2,784,607,528 44.4 1,928,802,758 5.8 1,823,060,264 9.9 1,658,777,652 1,595,839,720
Authorised capital 1,500,000,000 - 1,500,000,000 - 1,500,000,000 114.3 700,000,000 - 700,000,000 700,000,000
Issued, subscribed and paid-up capital 945,000,000 - 945,000,000 - 945,000,000 89.0 500,000,000 - 500,000,000 500,000,000
Reserves 992,992,037 47.9 671,233,709 62.9 412,156,569 (56.7) 952,853,578 54.4 617,078,388 521,695,213
Total Equity 1,937,992,037 19.9 1,616,233,709 19.1 1,357,156,569 (6.6) 1,452,853,578 30.1 1,117,078,388 1,021,695,213
Liabilities against assets subject to finance lease 27,066,577 (32.2) 39,939,206 1,360.7 2,734,293 74.0 1,571,449 32.0 1,190,126 2,938,636
Deferred Liabiliites 78,264,793 52,708,977
Total Non-Current Liabilities 27,066,577 (32.2) 39,939,206 1,360.7 2,734,293 74.0 1,571,449 (98.0) 79,454,919 55,647,613
Trade and other payables 699,298,498 (0.2) 700,541,805 26.1 555,682,697 52.1 365,277,927 36.2 268,178,473 259,222,731
Accrued mark-up 8,764,103 43.9 6,088,472 545.9 942,584 (100.0) 6,371,365 9,283,954
Short term borrowings 473,987,576 58.2 299,538,538 (100.0) 186,370,897 231,370,897
Unclaimed dividend 5,955,603 15.5 5,156,923 21.3 4,250,835 180.0 1,518,113 13,999,997
Taxation - net 90,160,791 (8.4) 98,444,857 1,435.5 6,411,400
Current portion of liabilities against assets subject to finance lease23,097,780 23.8 18,664,018 1,049.0 1,624,380 (11.7) 1,839,197 39.0 1,323,610 4,619,315
Total Current Liabilities 1,301,264,351 15.3 1,128,434,613 98.3 568,911,896 54.3 368,635,237 (20.3) 462,244,345 518,496,894
Total Liabilities 1,328,330,928 13.7 1,168,373,819 104.4 571,646,189 54.4 370,206,686 (31.7) 541,699,264 574,144,507
Total Equity and Liabilities 3,266,322,965 17.3 2,784,607,528 44.4 1,928,802,758 5.8 1,823,060,264 9.9 1,658,777,652 1,595,839,720
Non-Current Liabilities
Current Liabilities
Non-Current Asset
Current Assets
Share Capital & Reserves

9. RATIO ANALYSIS

10. Liquidity Ratios
Formula 2016 2015 2014 2013 2012 Average
CA /CL 1.78 1.74 2.47 3.66 2.44 2.42
(CA - Inventories)/CL 1.41 1.27 1.92 2.87 1.64 1.82
CGS /Avg Inventory (5) (5) (5) (4) (3) (4)
365/Inventory TO (69.57) (77.86) (72.18) (92.45) (127.50) (87.91)

11. Liquidity Ratios
*Number of days is not negative. As the CGS was inputted in excel as a negative value and used here that is why the answer is negative
Formula 2016 2015 2014 2013 2012 Average
CGS /Avg Inventory (5) (4.69) (5) (3.95) (2.86) (4.36)
365/Inventory TO (69.57) (77.86) (72.18) (92.45) (127.50) (87.91)
Formula 2016 2015 2014 2013 2012 Average
NetSales /Average AccountReceivables 3.216227945 4.0756929 3.97354857 4.00313 3.699927 3.79
365/Receivables TO 113.4869811 89.555325 91.8574403 91.17866 98.65058 96.95

12. Profitability Ratios
Formula 2016 2015 2014 2013 2012 Average
NI / Sales 11.51% 19.04% 19.07% 16.54% 11.16% 15.46%
GP / Sales 37.11% 49.07% 48.16% 44.01% 37.25% 43.12%
EBT / Sales 17.07% 26.88% 26.50% 24.09% 14.94% 21.89%
EBIT / Sales 18.02% 27.49% 26.77% 24.41% 16.80% 22.70%
EBITDA / Sales 19.86% 29.02% 28.26% 26.16% 19.29% 24.52%
NI / Avg TA 16.08% 31.12% 29.83% 22.11% 11.99% 22.23%
NI / Avg Equity 27.38% 49.33% 39.83% 29.96% 18.24% 32.95%

13. Profitability Ratios

14. `
*The reason why the TIE ratio is negative is because in excel the interest expense was entered with a negative sign and that value has been used in the
formula.
Formula 2016 2015 2014 2013 2012 Average
TL / Equity 68.54% 72.29% 42.12% 25.48% 48.49% 51.39%
Total Debt / EBITDA 1.581129073 1.0453358 0.68951359 0.607883 1.60579 1.11
EBIT / Interest Expense (18.96) (44.74) (97.08) (75.68) (9.02) (49.10)
Solvency Ratios

15. `
Solvency Ratios
18.96
44.74
97.08
75.68
9.02
-
20.00
40.00
60.00
80.00
100.00
120.00
2016 2015 2014 2013 2012
Times Interest Earned

16. `
Asset Utilization and Efficiency Ratios
Formula 2016 2015 2014 2013 2012 Average
Sales / TA 1.29 1.38 1.52 1.28 1.05 1.31
Sales / Avg NWC 4.58 4.63 3.23 2.83 2.96 3.65
Sales / Fixed Assets 4.46 4.66 5.59 4.91 3.29 4.58

17. `
MarketValue Ratios
Formula 2016 2015 2014 2013 2012 Average
Stock Price / EPS 18.09 20.35 17.06 9.26 10.13 14.98
Dividend Per share / Stock Price 0 0.31 0.52 1.4 0.83 0.61
Stock Price / Book Value per Share 4.35 6.84 26.12 9.85 4.66 10.36

18. `
Dupont Analysis
Dupont Analysis 2016 2015 2014 2013 2012
Return on Sales 11.51% 19.04% 19.07% 16.54% 11.16%
Sales to Asset (Turnover) 1.4 1.63 1.56 1.34 1.07
Financial Leverage Ratio 1.70 1.59 1.34 1.35 1.52
ROE 0.27 0.49 0.4 0.3 0.18

19. INDUSTRY COMPARISON

20. INDUSTRY COMPARISON
Income Statement
• Overall industry sales were 300 billion
• HNL sales were 04 billion
• Cost of sale for industry around 250 billion
• Cost of sale for HNL was 02 billion
• Gross profit of Industry was 45 billion
• HNL gross profit was 02 billion
• Net profit reaped by HNL was around 700 Million
in 2015
Balance Sheet
• Total Asset of Industry was 500 billion in 2015 and
previous years
• Total Asset of HNL was around 2-3 billion
• Industry equity was 05 billion in 2015
• HNL had equity of 1.6 billion in 2015
• Over all HNL liabilities have been lesser than the
equity which resulted in low finance cost while
overall industry suffered.

21. INDUSTRY COMPARISON
Ratios
Ratio 2015 2014 2013
1. Net Profit
Margin
HNL 19.04% 19.07% 16.54%
Industry -9.87 -9.51 -6.28
2. AssetTurnover
HNL 1.38% 1.52% 1.28%
Industry 0.49% 0.53% 0.53%
3. Return on Assets
HNL 31.12% 29.83% 22.11%
Industry -4.87% -5.06% -3.41%
4. Return on Equity
HNL 49.33% 39.83% 29.96%
Industry - -168.83% -38.87
5. Earnings per share
HNL 0.78 5.92 7.7
Industry -2.52 -2.43 -1.98

22. Summary
Creditors Perspective
• Low finance cost as compared to earnings
• High Interest coverage ratio
• Easy issuance of loan to HNL
• Reasonable profitability boosting the creditor’s
confidence in term of debt payment
Investors Perspective
• Reasonable profits were generated and
dividends were paid (Expect 2016)
• Earning per share reduced in 2016
• For Long term investors, dividends have been
reducing for last 02 years but paid regularly
• For short term investors, high risk due to
continuous decreasing trend of stock price