APL_2QFY21 EPS clocked in at PkR6.6 - lower than expectation, (AKD, Off the Analyst's Desk, Jan 27, 2021)
AKD Research - Off the Analyst's Desk January 27, 2021 APL: 2QFY21 EPS clocked in at PkR6.6 – lower than expectation · Attock Petroleum Limited (APL) announced result for 1HFY21 where company posted PAT of PkR2.2bn (EPS: PkR21.6), up 36%YoY majorly due to hefty inventory gains booked during 1QFY21. The result came in below our expectations of PkR23.8 majorly due to higher than expected operating expenses and finance costs. · For 2QFY21, PAT stood at PkR661mn (EPS: PkR6.6), increasing by 86% on YoY basis as significant inventory losses during 2QFY20 kept the base low while on QoQ basis, it decreased by 56% majorly due to hefty inventory gains in 1QFY21. · Gross profit for 2QFY21 stood at PkR1.7bn, in-line with our expectations of PkR1.7bn where inventory gains stood at meagre PkR155mn as per our estimates on the back of fortnightly pricing reducing the lag between international and local prices. · Along with the result, company announced a dividend of PkR2.5/sh, significantly lower than our expectation of PkR12/sh and company's long term trend of high payout ratio (in the range of 60-80%) which in our opinion points towards company's focus on infrastructure improvement. · We maintain our Buy stance on the stock with a Dec'21 TP of PkR434.3/sh however stock can remain under pressure in near term on the back of a disappointing result/payout while depleting market share (8.8% for 2QFY21 against 10.3% for 2QFY20) remains a concern. However, continued focus on infrastructure improvement can result in increased retail footprint in medium to long term.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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