Pakistan OMC's: PSO & HASCOL Result Previews,
PSO expected to post NPAT of PkR6.3bn for 1HFY19, down 26%YoY: Board of Management of PSO is scheduled to meet tomorrow (Feb 16 ’19) to announce 1HFY19 results. For 2QFY19, the company is expected to post an EPS of PkR5.45 vs. PkR8.93 in 2QFY18. A 46/3% YoY/QoQ decline in volumes (in-line with an industry-wide down cycle) will soften the topline as economic cyclicality dampens demand, leading to a YoY decline while the QoQ decline was on the back of seasonality (worsened by smuggled product). Declining oil prices will also drag the bottom-line as we expect the company to incur inventory loss of PkR1.2bn for the quarter vs. an inventory gain of PkR1.8bn in 1QFY19, taking the total for 1HFY19 to PkR0.6bn. Moreover, a 12% depreciation of PkR vs. USD is expected to induce exchange loss of PkR0.3bn for PSO. For 1HFY19, the EPS is expected to come out at PkR16.1 vs. PkR21.8 in 1HFY18, down 26%YoY on the back of decreased volumes, higher inventory/exchange loss.
HASCOL is set to record an EPS of PkR9.16 in CY18, down 14%YoY: We expect the company to record NPAT of PkR1.2bn (EPS: PkR9.16) in CY18 vs. PkR1.4bn (EPS: PkR9.68) in the corresponding period last year. The results could be accompanied by a dividend of PkR2.5/sh. For 4QCY18, we expect the company to post an EPS of PkR-1.25, -159/-138% YoY/QoQ driven by 57.23%YoY decrease in gross profit on the back of decrease in market share to 9.5% in 4QCY18 vs. 10.9% in 4QCY17 as sales volume receded by 37%YoY, dropping significantly from the high-growth trajectory witnessed previously. Exchange loss has been a major drag on company’s earnings, totaling to PkR2.5bn in 9MCY18 where we expect the exchange loss for 4QCY18 to the tune of ~PkR0.5mn, taking the total to ~PkR3bn for CY18. On other hand, weak global crude and refined product price volatility imply an inventory loss of ~PkR400mn for 4QCY18, where a reliance on imported sourcing and sourcing prowess (timing of shipments) could deliver upsides to our estimates.
AKD Research
Hascol Petroleum Limited is a Pakistan-based company, which is engaged in procurement, storage and marketing of petroleum and related products. The Company is involved in the sale of petroleum products, such as fuel oil, high speed diesel, gasoline, Jet A-1, liquefied petroleum gas (LPG) and lubricants. The Company offers products, such as Tiger Super, Rocket Diesel and Furnace Oil. The Company offers Fuchs Lubricants products, which include corrosion preventives, quenching oils, industrial lubricants, open gear lubricants, greases, automotive oil and metal working fluids. The Company also markets LPG as an automotive fuel through its retail network. The Company is engaged in owning, leasing and renting oil storage facilities, as well as importing petroleum products. The Company has storage facilities at Machike, Shikarpur and Daulatpur. The Company sells its product to dealers, government agencies and autonomous bodies, independent power project and other corporate customers.
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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