KARACHI: The Yousuf Dewan Group released financial results of four of its nine listed firms on Tuesday as it continued to fight a standoff with lenders in an effort to resolve financial woes of one of Pakistan’s largest industrial conglomerates.
Dewan Cement, Dewan Textile Mills and Dewan Mushtaq Textile Mills posted profits for the first quarter (July-September) of fiscal year 2013-14. But the sad state of Dewan Salman Fibre continued as the country’s largest polyester and only acrylic maker remained shut.
Dewan Cement’s net profit increased 47% to Rs72 million in the quarter compared with the same period of previous year on the back of higher sales and good market condition.
Cement sales were up 11.8% to Rs2.067 billion while gross profit climbed 10.7% to Rs228 million. The company saw a 143% rise in distribution expenses to Rs34.7 million.
The company runs two cement plants with one located near Karachi and the other in Hattar, Khyber-Pakhtunkhwa.
Net profit of Dewan Textile Mills rose 935% to Rs39 million on sales of Rs1.047 billion, which grew 17% compared to a year ago. Gross profit was up 65.7% to Rs103 million.
Dewan Mushtaq Textile Mills also showed marginal improvement. It posted net profit of Rs14.8 million against a loss of Rs5.8 million in previous year’s quarter. Sales saw improvement of 22% to Rs511 million while gross profit increased 500% to Rs42 million.
Dewan Salman Fibre didn’t make any sales. But it did spend money to maintain the plant, machinery and inventory as was evident from Rs180 million recorded in cost of sales. Its loss after tax was Rs310 million.
The results indicate that this could be another year when Dewan Salman Fibre may completely remain shut. Last fiscal year was the first since its inception in which the company didn’t record any sales.
Yousuf Dewan Group, commonly known as Dewan Group, was a thriving car-to-thread conglomerate until 2007.
It borrowed heavily to fund expansion, mergers and acquisition often bailing out banks by acquiring financially troubled companies like Dhan Fibres and Pakland Cement – large transactions of their times.
Most of its units remain closed or are running below capacity mainly because banks have refused to meet working capital requirement of the group.
No one in the group is ready to speak on record. Banks say Dewan is the largest defaulter in the private corporate sector, which has a debt of Rs50 billion. The latest settlement for four textile firms and the cement company was agreed in 2011.
Published in The Express Tribune, October 30th, 2013.
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