IDLC Investment - Company Insight

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Company Profile
Aftab Automobiles Ltd started its commercial operation in 1982 and was listed in DSE in 1987. 31% of total shares of ATABAUTO are held by its sponsors, Navana Group. The company has been successfully assembling TOYOTA & HINO vehicles for Bangladesh market since 1982, and has recently lunched assembly of HINO -Mini bus.
Key Revenue Drivers & Company Insight
AFTABAUTO assembles automobiles as well as manufactures automobile paint, batten, furniture etc. Auto Assembly serves as the key revenue source, providing on average (latest 2 year) 83.5% of net revenue. In addition, ATABAUTO has investments in Navana Batteries Ltd., Navana Furniture Ltd., and Navana Paints Ltd. These investments provide on average 42% (latest 2 years) of consolidated revenue for AFTABAUTO.
In 2010, AFTABAUTO went for BMRE (Balancing, Modernization, Renovation and Expansion) of its existing plant through issuance of BDT 1800 mn, fully convertible, 5% dividend preference share (face value BDT 100 per share). Later on, the preference shares were fully converted into ordinary shares @ BDT 158.46 per share (face value BDT 10 per share). Due to earthquake and subsequent tsunami in Japan, BMRE program could not be completed in 2011 for the scarcity of technological and supply support.
Financial Performance
Gross and Net profit margins increased primarily from improved product mix and cost controls. In addition, profit on investment in shares added a BDT 512.76 mn non-operating income that boosted net profit margin as well as return estimates in 2011.