By: Arif Habib Limited
Trakker Pakistan Limited: During FY14; Trakker Pakistan Limited has shown marked improvement in revenues and earnings, an impressive 36% YoY growth in revenues in FY14, reaching PKR 1,405mn, which resulted from colossal growth of 404% in equipment rentals revenue, followed by Equipment installation & sales and Navigation services, which grew by a significant 29% and 46% YoY, respectively. Cost of sales grew 38% YoY in FY14 to PKR 672mn, due to high volumes, including 40% rise in activation charges, and a 17% jump in salaries.
Operating Expenses: Distribution expenses of the company rose 41% YoY in FY14 to PKR 240mn, while admin expenses also increased to PKR 277mn, up 13% YoY as the revenues of the company grew massively during the year. Finance cost rose 16% YoY during the period to PKR 130mn as the company’s long term financing increased for funding its current projects.
Increased EBIT/EBITDA/Net Margins: Though company’s gross margins stayed almost stagnant in FY14 at 52%, its EBIT margins grew by a huge 270bps to 15.4%. Similarly, EBITDA margins also went up by 120bos to 24.08% from 22.9% in FY13. TPL’s Profit after tax grew to PKR 88mn (PKR 0.41/share) in FY14, up 79% YoY, with company’s net margins growing by a massive 151bps to 6.3%, from 4.8% earlier.
During 9MFY15: TPL’s sales grew 4% YoY to PKR 1,054mn where a significant reason for revenue growth in 9MFY15 was Container Tracking segment, which grew to over 39,000 monitored containers, compared to 35,000 last year. However, higher costs during the period (cost of sales up 16% YoY taking into account one-time charges) caused margins to settle at 47% during the period, from 53% in the same period last year. However, a major contributor to earnings during the period was Other Income, which was massively up to PKR 164mn, on account of gain on sale of 33% of its holdings in TPL Direct Insurance), compared to PKR 11mn recorded during 9MFY14, representing an offshoot of 1,430% YoY.
Profit after tax, as a result, recorded at PKR 159mn (EPS: PKR 0.73) in 9MFY15, up a massive 240% YoY during the period.