POL & APL_3QFY18F Result Previews
POL’s BoD is scheduled to meet on Monday, Apr 16’18 to deliberate on its 3QFY18 accounts, where we anticipate the company to publish earnings of PkR3.75bn (EPS: PkR15.85) cumulating to 9MFY18 profitability of PkR8.51bn (EPS: PkR35.96), up 14.0% from last year’s PkR7.47bn (EPS: PkR31.55). While the 9M profitability is higher on account of elevated oil prices (Arab Lite +22.0%YoY) and enhanced production by 4.8%YoY on BOE basis (majorly due to Jhandial’s addition), it is pertinent to note that the results incorporate older gas prices for TAL block fields considering that the decision in this regard is still pending. Recall, the company reversed enhanced revenues amounting to PkR3.01bn in 2QFY18 earlier being accounted for TAL block fields from Jul 1’15 till Dec 31’17 prior to the Windfall levy issue (as discussed upon in our daily “Pakistan E&Ps: The looming Risk” dated Feb 27’18). Despite the absence of dry wells, exploration expenses in the period are expected to grow by 118%YoY as the company conducted seismic surveys on Balkassar lease & DG Khan concession along with processing data from Joyamair/Khaur North leases as well. Moreover, while other income can show an increment of 85%YoY on account of exchange gains on US$ denominated financial assets, losses on account of US$ denominated decommissioning costs can limit the net positive impact. In-line with its policy, we do not expect the company to declare a dividend in this quarter.
APL: 3QFY18F Result Preview
For APL, we expect NPAT for 3QFY18 to amount to PkR1.41bn, up 17%YoY but down a muted 5%QoQ. Following on, a 3%QoQ hike in volumes and smooth upwards sailing of MS & HSD ex-refinery prices in Feb & March 18 could lead to inventory gains in the quarter (expected at ~PkR750mn). That said, exchange losses from PkR devaluations vs. the greenback are expected to deplete the bottom- line, resting at ~PkR226mn for the quarter. Looking ahead, growth from fuel farm venture with PSO at the Islamabad airport (expected to be inaugurated on Apr 20’18), expansion in storage facilities and iretail fuels are expected to supplement earnings in the medium term. We have a FCFE based TP of PkR725/sh, implying a BUY stance. Keeping in step with the OMCs bi-annual payout policy, no payout is expected to accompany results.
AKD Research
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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