FATIMA & FFC_2QCY17 earnings preview, (AKD Daily, Jul 28, 2017)
​FFC: 2QCY17 earnings preview
FFC is scheduled to announce its 2QCY17 financial results on Monday (Jul 31' 17), where we expect FFC's earnings to clock in at PkR3.32bn (EPS: PkR2.61) - up 53%YoY/51%QoQ. This significant uptick in earnings is expected on the back of: 1) strong 14%YoY/70%QoQ growth in topline to PkR19.06bn caused by impressive 1.21xYoY/1.88xQoQ increase in Urea offtake to ~709k tons and 2) lower effective tax rate of 29% in 2QCY17 against 48% in 2QCY16. On a cumulative basis, we expect 1HCY17F earnings to stand at PkR5.51bn (EPS: PkR4.33) compared to PkR4.89bn (EPS: PkR3.85) in 1HCY16, up 13%YoY. Alongwith the result, we also expect an interim cash dividend of PkR2.25/sh. Having lost 20%CYTD, the stock currently trades at a CY17F PE of 8.2x where our Jun'18 TP of PkR120.1/sh offers an upside of 43% from current price level. BUY! .
FATIMA: 2QCY17 earnings preview
FATIMA is expected to announce earnings for 2QCY17 next month (Aug’17), where we expect the company to post unconsolidated NPAT of PkR2.54bn (EPS: PkR1.21) vs. NPAT of PkR1.85bn (EPS: PkR0.88) in 2QCY16, depicting an increase of 37%YoY/12%QoQ. The improvement in earnings is expected on the back of: 1) impressive 20%YoY/10%QoQ growth in topline to PkR9.04bn reflecting +5.19x/-40%/+1.32xYoY movement in Urea/NP/CAN off-take to ~130k/86k/157k tons and 2) 7.7ptsYoY improvement in GM to 55.6% in 2QCY17 due to relatively stable product prices, lower phosphate rock prices and effective utilization of fixed cost at higher volumes. On a cumulative basis, we expect 1HCY17F earnings to stand at PkR4.81bn (EPS: PkR2.29) compared to PkR2.98bn (EPS: PkR1.42) in 1HCY16, up 62%YoY. Alongwith the result, we also expect an interim cash dividend of PkR1.60/sh. Having lost 13%CYTD, the stock currently trades at an attractive CY17F/CY18F PE of 6.3x/5.9x where our Dec'17 TP of PkR45.11/sh offers an upside of 41% from current price level.
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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