MACPAC Films Limited (MACFL)

Research Team

Table of Contents

In the 9MFY24, MACPAC Films Limited disclosed a net profit of PKR 244.41 million (EPS: PKR 4.12), marking a 19% year-on-year decline from PKR 303.34 million (EPS: PKR 5.12) in the same period last year (SPLY). The downturn in profitability was attributed to the imposition of a super tax, increased utility rates, and higher inflation.

Profit Before Tax (PBT) amounted to PKR 399.02 million, registering a 12% year-on-year decrease from PKR 454.44 million in the corresponding period, driven by controlled operating costs and efficient management of working capital.

Net sales experienced an 8% growth to PKR 4.26 billion in 9MFY24 compared to PKR 3.94 billion in 9MFY23, while exports of products increased to PKR 32 million during the same period. Management reported stagnation in topline growth due to supply constraints.

Management indicated 100% capacity utilization, with production and sales remaining stable around 13,000 and 12,000 metric tons during the last three years. In 9MFY24, production and sales were reported at 13,439 MT and 11,940 MT, respectively.

Gross Profit declined from PKR 880 million in FY23 to PKR 765 million in FY24. Total assets and shareholder’s equity increased to PKR 4.7 billion and PKR 2.0 billion in 9MFY24.

Cost of sales surged by 14% to PKR 3.50 billion in 9MFY24 compared to PKR 3.06 billion in 9MFY23. Finance costs significantly decreased by 7% to PKR 97.67  million in 9MFY24 from PKR 104.50 million in SPLY.

Administrative expenses saw a 64% year-on-year increase, reaching PKR 230.37 million in 9MFY24 compared to PKR 140.86 million in 9MFY23, while other expenses decreased by 90% to PKR 20.46 million from PKR 212.99 million during the same period. Other
income witnessed a significant decline, down by 11% year-on-year to PKR 94.73 million.

Gross profit decreased by 13% to PKR 765.55 million in 9MFY24 from PKR 879.80 million in 9MFY23 due to increased costs and because the full price increase could not be completely passed on.

The current ratio continuously improved since FY21 and reached 1.18 in 9MFY24 from 0.89 in FY21. Quick ratio was reported at 0.63 compared to 0.53 during the same period. Cash to current assets and cash to current liabilities were reported at 5% and 6%, respectively, in 9MFY24.

Management highlighted the successful implementation of SAP within six months and expects to further enhance business efficiency.

Going forward, Macpac anticipates homo polypropylene demand to remain weak, further affecting the local demand. Prices and revenue are expected to remain under pressure due to weak local demand, increased competition, and increased supplies from expansion of other industry players.

Due to increased gas prices from 1,200 mmbtu to 2,750 mmbtu, the Company is exploring alternative options. The solar power plant is expected to be completed by 1QFY25. Macpac management is focused on bottom-line growth by working on cost efficiencies and product diversification in the value-added segment.

Furthermore, the company is increasing its international footprint by participating in international exhibitions. The dividend policy of the Company is associated with the growth strategy of the Company.

Important Disclosures
Disclaimer: This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose

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