EUR 9.11 For Business Accounts Only

INIL_Analyst Briefing Takeaways, (AKD Off the Analyst's Desk Sep 30, 2022)

AKD, Off the Analyst's Desk

INIL: Analyst Briefing Takeaways

International Industries Limited (INIL) organized its analyst briefing today to apprise investors of the FY22 result and future outlook. To highlight, the company reported an unconsolidated NPAT of PkR2.2bn (EPS: PkR16.4) in FY22 vs. NPAT of PkR2.3bn (EPS: PkR17.6) in the same period last year. On a quarterly basis, 4QFY22 net loss stood at PkR239mn (LPS: PkR1.81), down 2.4xQoQ. The company reported a consolidated NPAT of PkR4.7bn (EPS: PkR18.4) in FY22 vs. NPAT of PkR8.7bn (EPS: PkR41.4) in the same period last year. The company also announced a final cash dividend of PkR8.0/share in FY22. 

• Revenue increased by 31%YoY in FY22, mainly reflecting higher steel prices which offset the decline in offtakes (12%YoY) to 171.3K tons. Local steel sales clocked in at 116.7K tons (-13.4%YoY) in FY22 and global sales clocked in at 47.2K tons (+9%YoY) in FY22. Polymer sales clocked in at 7.5K tons, down a whopping 38%YoY in FY22. Moreover, the major export markets of the company were Australia, the Americas, and the EU in FY22.
• Polymer sales were a major hit in FY22 largely attributable to the burgeoning circular debt situation where SSGC and SNGPL failed to issue tenders as this was a tender-based high margin segment for INIL.   
• Finance cost increased by 56.4%YoY in FY22 as a result of the policy rate increasing to 15% and restriction imposed on LCs of imports where cumulatively PkR113mn were charged in finance cost which impacted the bottom line. However, stupendous dividend income from subsidiary companies propelled other income to PkR3.3bn (+213%YoY in FY22) which helped in amplifying the bottom line.
• Going forward, the UPVC sewerage pipes project has been successfully commissioned at the Shekhupura site and the product was launched in Aug’22 which will complement the PPRC product line.
• Furthermore, management remains hopeful of achieving volumetric growth of 5%YoY in steel pipes in FY23. Additionally, management also foresees volumetric growth of 10-20%YoY in exports as well with the majority of the sales coming from Australia and North America. To note, Australia’s share in export sales has increased to 35% in FY22 from 29% in FY21. The company has a well-established sales and distribution network in the country with the help of INIL’s subsidiary, IIL Australia, and is expected to grow its market share in Australia even further in the coming years.  

AKD Research