FATIMA - 3QCY23 Result review, (AKD Off the Analyst's Desk Oct 26, 2023)
AKD, Off the Analyst's Desk
FATIMA - 3QCY23 Result review
FATIMA just announced their 3QCY23 results, posting a standalone PAT of PkR7.5bn (EPS: PkR3.58/sh) vs. PAT of PkR4.4bn (EPS: PkR2.10/sh) in the SPLY. On a QoQ basis, the company posted a 5.1x hike in earnings, due to higher topline propelled by better offtakes and prices. Total 9MCY23 EPS came in at PkR6.02/sh, against PkR4.88/sh earned during 9MCY22. The company has not paid out any dividends this quarter.
- Revenues rose significantly QoQ to PkR75.5bn vs PkR46.8bn (↑61.4%) in 2QCY23 and PkR37.4bn in 3QCY22 (↑101.9%YoY), on the back of higher retention prices and healthy offtakes, especially owing to continued operations of DH (Sheikhupura plant) consistently this year.
- Gross margins clocked-in at 29.3% against 30.5% in 2QCY23, which we opine is due to the higher cost of the DH plant run on LNG and Pak Arab plant run on PP-12 prices. Gas prices for the Sadiqabad plant remained unchanged during the quarter.
- Finance cost dropped by 34.2% QoQ which we expect is owing to a drawdown of total debt (Long term liabilities were reduced in 2QCY23). Furthermore, other income increased by 100.0%QoQ owing to better cash balances on improved working capital management, in our opinion.
- Effective taxation came in at 48.8% (higher than our expectation) vs. 85.7% last quarter, where the impact was due to the retrospective imposition of supertax. We are awaiting full disclosures for further clarity.
AKD Research
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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