APL_Positives made prominent by emerging headwinds
Bearing headwinds from tumbling FO consumption (industry volumes down 21%QoQ) and PkR depreciation (weakening 5.1% during 2QFY18), the OMC space may be heading for a rough, late business upcycle. Stark reversal in refined POL benchmarks witnessed in the better part of 1QFY18 following two years of tumbling oil prices (49.7% decline on average) are exerting input cost pressures (average ex-refinery prices for 2QFY18 of HSD/FO +29/+24%YoY). For these reasons, we look at industry profitability (PSO + APL) over the last 8yrs, highlighting depressed margins and earnings as a major symptom of unexpected devaluation (FY13-14). APL stands on its high asset quality, unlevered balance sheet, creating a case for slower below the line margin attrition. Exemplifying these credentials through solid earnings, APL is expected to report NPAT of PkR1.32bn (EPS: PkR15.9) -1%QoQ/+11%YoY, taking 1HFY18E to PkR2.65bn marginally lower (-3.6%YoY, EPS of PkR31.9/sh).
Attock Petroleum Limited is engaged in the procurement, storage and marketing of petroleum and related products. The Company offers a range of lubricants blended with base oils and additives at its Automatic Batch Blending facility. Its products include diesel engine grades, such as GOLD TURBO PLUS, GOLD TURBO, GOLD XTRA and GOLD-50; gasoline engine grades, such as HIDRIVE SUPREME, HIDRIVE SUPER and ATTOCK T-2; industrial grades, such as ATTOCK Hydraulic Oil AW Series, ATTOCK Gear Oil EX Series and ATTOCK TURBINE Oil, and gear oils, which include various specifications, such as EP 140, EP 90, 85W/90 and 85W/140. It has a multi-fuel retail network of approximately 540 retail outlets. The Company's retail outlets also offer compressed natural gas, as well as non-fuel retailing options, such as tuck shops, car services and lubricants. It supplies various types of fuels to various businesses, including manufacturing industry, armed forces, agricultural customers and power producers.
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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