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Tuesday, December 11th, 2018

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Home » Brief Recordings » Tri-Pack Films
  • Brief Recordings

Tri-Pack Films

  • Jun 22nd, 2017

Tri-Pack Films Limited (PSX: TRIPF) was incorporated in 1993 as a joint venture between Mitsubishi of Japan and Packages Limited of Pakistan. The commercial operations of the company started in 1995. Head office of the company is situated in Karachi, while its two plants are located in Port Qasim and Hattar (KPK).

Tri-Pack is primarily engaged in production of two types of packaging films, which are Biaxially Oriented Polypropylene (BOPP) and Cast Polypropylene (CPP) film. The company initially started with production of BOPP films, which are moisture resistant and produced in four different grades – plain, composite, cigarette and pearlized.

The plain BOPP film grade is used in lamination of cardboard, adhesive tape and general packaging. The composite film is used in packaging of confectionery, soap and food items. Cigarette films, as the name suggests, is used by the tobacco industry. The pearlized BOPP film is hot sealed on both sides and is used to pack tea, gift wrappers and ice bars. The CPP film also has various grades that are used in different industries such as poultry and fast moving consumer goods.

Historical performance: Over the last five years, the financial performance of Tri-Pack Films has been volatile to say the least. Years 2013 and 2014 were particularly bad for the company. In 2014, the company posted loss per share of Rs 5.9. In 2013, the earnings per share was Rs 0.76 compared to Rs 15.05 in 2012.

Volatility in the financial performance of the company was due to two main factors. Firstly, the input cost of the company kept on increasing because of the hike in energy tariff. Secondly, the local market saw an influx of imported products through illegal channels every year, which kept a pricing pressure on the company. Seven percent of domestic of BOPP films demand was being filled by these illegal imports.

However, the company took advantage of those difficult years and was able to still increase production and maintain efficiency throughout the organisation. The fruits of these steps can be seen in the current year when demand and raw material prices are in company’s favour.

Recent performance: Tri-Pack first quarter of 2017 ended on a high note. During this quarter the sales of the company increased by 18 percent (volume growth 17 percent), while earnings of the company increased by 55 percent.

Major reason for the growth in top-line was the overall increase in demand. On the other hand, the gross margins of the company didn’t show any improvement because increase in input costs such as feedstock prices and maintenance of production lines.

Net margin of the company increased by 2 percent mainly because of massive reduction in finance costs (45 percent). The company reduced its short term borrowings for which the company had previously issued right shares.

Shareholding pattern: Tri-Pack majority shareholding is with its group companies which account for about 63 percent of the holding. Within this holding, Mitsubishi Corporation of Japan also holds about 39 percent. The biggest shareholder of the company is Packages Limited with 12.9 million shares. The general public holds about 24 percent of the shareholding in the company. Similar holding structure can be seen in other Packages group companies as well.

Share price performance vs. KSE-100: The share price of Tri-Pack Films (PSX: TRIPF) over the last twelve months has largely outperformed the benchmark KSE-100 index. Rally in the stock started after the issuance of right shares and subsequent three years’ presentation of financial projection of the company.

Since Tri-Pack has direct exposure to the consumer sector, its stock is given a higher valuation compared to the market average. During the past few weeks, all consumer and high p/e stocks have seen some correction, and the share price of Tri-Pack in similar vein has also come down. But if the company maintains its earnings momentum and stays on course with its projection, it’s a matter of time before the stock starts a fresh rally.

Future outlook: Tri-pack film products are directly linked with overall consumer demand in the country. The company’s major customers are from the FMCG sector, which the company expects to grow on average by seven percent.

On the other hand, rising energy costs still remain a concern for the company, which will keep its margins under pressure. Analysts are of the view that company is now in a stable position and has good control profitability especially after paying some the short term debt.


Tri-Pack Films Q1CY17 Snapshot


Particulars (Rs. mn) Q1CY2017 Q1CY2016 YoY


Revenue 2,889 2,446 18%

Cost of sales 2,412 2,025 19%

Gross profit 477 422 13%

Distribution cost 81 68 20%

Administrative expenses 81 82 -2%

Other expenses 17 10 72%

Other income 11 10 2%

Finance cost 77 141 -45%

Profit before tax 232 132 76%

Taxation 49 31 581%

Profit after tax 183 102 80%

EPS (basic and diluted) 4.72 3.04 55%

GP Margin 17% 17% same

NP Margin 6% 4% up 200 bps


Source: Company Accounts/PSX


Pattern of Shareholding (As of December 31, 2016)


Directors, CEO, and their Spouses and minor children 937,003 1.90%

Associated Companies, Undertakings nd related parties 24,359,936 62.78%

Babar Ali Foundation 177,186 –

IGI Insurance Limited 3,750,417 –

Mitsubishi Corporation – Japan 7,499,000 –

Packages Limited 12,933,333 –

Insurance Companies 685,577 2.56%

Mutual Funds and Modarabas 770,643 2.28%

General Public 9,354,698 24.10%

Others 2,688,080 6.93%


Source: Company Accounts

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