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ISL_FY22 Analyst Briefing Takeaways,(AKD Off the Analyst's Desk Sep 29, 2022)

AKD, Off the Analyst's Desk

ISL: FY22 Analyst Briefing Takeaways

International Steels Limited (ISL) organized its analyst briefing today to apprise investors of the FY22 result and future outlook. To recall, ISL announced the FY22 result where the company posted PAT of PkR5.4bn (EPS: PkR12.44), down 27.5%YoY. ISL posted PAT of PkR57mn (EPS: PkR0.13), down 98%YoY in 4QFY22. The company also announced a final cash dividend of PkR6.5/share in FY22: 

 

  • Revenue increased by 11.0%YoY/31%YoY in 4QFY22/FY22, mainly reflecting higher steel prices which offset the decline in offtakes (14%YoY) to 424K tons. Galvanized sales clocked in at 240K tons (-18.1%YoY) and Colled Roll Coil (CRC) sales clocked in at 184K tons (-7.5%YoY) in FY22. Local and export sales showed impressive growth of 31%YoY and 57%YoY in FY22, respectively. Moreover, the major export markets of the company during FY22 were North America, GCC, Asia, and the EU.
  • Local industry volumes of flat steel decreased by 15.4%YoY to 1.1mn tons in FY22, comprising of 535K tons of CRC and 564K tons of both galvanized and coated steel.
  • Management believes ISL is likely to be the biggest supplier to the pipe steel manufacturers which have an approximate market size of 200K tons in FY23.
  • Finance costs increased by a whopping 63%YoY in FY22 as a result of the policy rate increasing from 7% to 15% which impacted the bottom line.
  • During FY22, the CRC debottlenecking project with a total CAPEX of PkR1.23bn has successfully commissioned and the new capacity currently stands at 400K tons vs 230K tons previously. Modified skin passing capacity has also been increased to 350K tons from 230K tons. Furthermore, C and Z purlins have successfully been commissioned at the service center and have started commercial production.
  • Going forward, completion of debottlenecking in CRC finishing capacity has enabled the company to cater to larger domestic demand for white goods, as well as additional demand coming from pipe manufacturers. Furthermore, additional CRC capacity will also help ISL to increase CRC’s contribution to the export sales mix from 20% to around 40-50% in the coming years. Hence, management also foresees robust growth in exports (total export sales: PkR18.7bn (+57%YoY) in FY22) to continue in FY23 where ISL is expected to export to major countries across the globe. 
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AKD Securities Limited
AKD Securities Limited

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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