Report
Team AKD Research
EUR 9.24 For Business Accounts Only

FFBL & EFERT_CY18 Result Previews,

FFBL to post an NPAT of PkR1.2bn in CY18, +21.2%YoY: Board of Directors of Fauji Fertilizer Bin Qasim (FFBL) is scheduled to meet tomorrow to announce CY18 results. We expect the company to record an NPAT of PkR1.2bn, +21.2% YoY. Alongwith the results, we expect the company to announce a dividend of PkR1/sh.  For 4QCY18, we expect the company to post an EPS of PkR1.52 vs. PkR1.37 in the corresponding period last year. We expect topline to face attrition of 7%YoY on account of lower DAP volumes of ~34.1%YoY (total industry DAP volumes shrunk by 6.2%YoY). Along with increase in phosphoric acid prices by ~35.5%YoY in dollar terms, coupled with PkR devaluation of ~25.8%, GMs are likely to drop down 11.1% vs. 15.4% in 4QCY17.  The key variable in 4Q results would be the commencement of dividend income from Fauji Power Company Limited (Other income +63.7%YoY). We have a “SELL” stance on the stock with Dec’19TP of PkR35/sh. Potential FFL sale and resolution of GIDC is not yet incorporated in our estimates

EFERT to recorded an EPS of PkR12.96 in CY18, +55.1%YoY: Engro Fertilizer (EFERT) is likely to announce CY18 results on Feb 8, 2019. We expect the company to record an NPAT of PkR17.3bn (EPS: PkR12.96) in CY18 vs. PkR11.16bn (EPS: PkR8.35) in the corresponding period last year. The results could be accompanied by a dividend of PkR3.5/sh, taking cumulative payout for the year to PkR11.5/sh. For 4QCY18, we expect the company to post an EPS of PkR3.79, +19.5/-0.8% YoY/QoQ driven by 27.7%YoY increase in topline on the back of 25.2%YoY increase in DAP volumes and higher retention urea prices reducing impact of lower urea volumes (-2.4%YoY). We expect GMs to remain flat YoY. We expect the company to post tax reversal of PkR500mn in 4QCY18, taking full year tax credit to ~PkR2.0bn.

AKD Research

Underlying
Engro Fertilizers

Engro Fertilizers Limited is a Pakistan-based company, which is engaged in manufacturing, purchasing and marketing of fertilizers. The Company's brands include Engro Urea, Engro NP, Engro DAP, Zingro, Engro MOP, Engro SSP and Engro Zarkhez. Engro NP is the Company's fertilizer brand with Nitrogen and Phosphorous content in equal quantity. Engro DAP primarily contains Di-Ammonium Phosphate, and is imported by Engro EXIMP and marketed by the Company. Engro DAP is marketed in approximately 50 kilogram bags. Zingro is a micronutrient fertilizer, and is imported by Engro EXIMP and marketed by the Company. Engro Zarkhez has Nitrogen, Phosphorous and Potassium, and is primarily offered for sugar cane, fruit orchards, vegetables, potato and tobacco farming. Engro Envy is primarily offered to urban market for gardens, lawns, flower beds, fruit plants and ornamental plants. The Company is a subsidiary of Engro Corporation.

Provider
AKD Securities Limited
AKD Securities Limited

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.

Analysts
Team AKD Research

Other Reports on these Companies
Other Reports from AKD Securities Limited

ResearchPool Subscriptions

Get the most out of your insights

Get in touch