Result Previews: HBL CY19 & PSO 1HFY20, (AKD Daily, Feb 14, 2020)
HBL: CY19 Result Preview
HBL earnings likely to clock-in at PkR10.1/sh for CY19: Habib Bank Limited (HBL) is set to announce its CY19 end result on Feb 19th 2020 where we expect CY19 NPAT to be recorded at PkR15.0bn (EPS: PkR10.1) vs. PkR12.4bn (EPS: PkR8.2) in the same period last year. Along with the result, we expect the bank to deliver a dividend of PkR1.5/sh taking cumulative payout for the year to PkR5.25/sh. On a quarterly basis, 4QCY19 earnings are likely to clock in at PkR4.25/sh, +26.4%QoQ/2.4xYoY, driven by NIMs inching towards 4.4% vs. 4.1% in the previous quarter as lagged impact of interest rate hike creeps-in. Potential impairment reversal should negate any carryover of credit stress seen in the previous quarter. Additionally, NFI contribution to total income is likely to stand at 23.2%, flat QoQ on the back of higher seasonal fee income. That said, administrative expenses are expected to remain elevated; C/I at 73.6%, slightly higher than 71.7% recorded in the previous quarter.
PSO: 1HFY20 Result Preview
PSO – 1HFY20 unconsolidated EPS to clock in at PkR14.2, up 56.7% YoY: We expect PSO to post an unconsolidated EPS of PkR14.2 for 1HFY20, up 56.7%YoY as expected inventory gains of PkR1.8bn for 1HFY20 against inventory loss of PkR3.1bn in 1HFY19 will uplift the earnings while increase in volumes of 9.9%YoY are also expected to provide support where retails fuels led the growth with an increase of 10.2%YoY. For 2QFY20, a mammoth increase of 45xYoY is expected, taking unconsolidated PAT to PkR3.1bn (EPS: PkR6.66) mainly on the back of low base as hefty inventory loss suppressed PAT to mere PkR68mn for 2QFY19 while on sequential basis, PAT is expected to recede by 11.4%. We expect company to record a meagre inventory gain of PkR29mn for 2QFY20 as inventory gains from MS/HSD are expected to be mitigated by losses on FO on the back of prices nose-diving in anticipation of IMO2020. However, we highlight an upside to our estimates can arise from late payment surcharges being recorded after company received payment of ~PkR22bn against LNG and power sector receivables during 4MFY20. Along with the result, we expect company to announce a dividend of PkR5/sh. ​
Habib Bank Limited is engaged in commercial banking and asset management related services in Pakistan and overseas. The Bank's segments include Branch Banking, which consists of loans, deposits and other banking services to agriculture, consumer, small and medium-sized enterprise (SME), and commercial customers; Corporate Banking, which consists of lending for project finance, trade finance and working capital to corporate customers and it also provides investment banking services, including services provided in connection with mergers and acquisitions; Treasury, which consists of trading, fixed income, equity, derivatives and foreign exchange businesses, and it also includes credit, lending and funding activities with professional market counterparties; International Banking, which is engaged in monitoring and reporting purposes and consists of its operations outside of Pakistan, and Head Office/Others. It operates in Pakistan; Europe, Middle East and America, and Asia and Africa.
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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