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MARI & HCAR_Result Previews, (AKD Daily, Jan 25, 2023)

AKD Daily
MARI & HCAR: Result Previews


MARI – Earnings to clock in at PkR81.66/sh in 2QFY23: Mari Petroleum Company Limited (MARI) is scheduled to post 2QFY23 earnings on Thursday, wherein we expect the company to report profit after tax of PkR10.89bn for the quarter (EPS: PkR81.66), changing by -14%/46% on QoQ/YoY basis. Said decline in bottom line vs. the previous quarter is majorly attributable to lower offtakes from MARI field during (Oct/Nov’22) due to annual turnarounds of EFERT and FFC plants during the period, alongside damaged SSGC pipeline in Bolan area. For this reason, we expect MARI’s topline during the quarter to end at PkR28.1bn, changing by -12%/30% on QoQ/YoY basis. Although, recent positives include revised well-head prices amidst higher crude oil prices alongside 28%YoY currency depreciation. On the cost front, we expect exploration/operating expenses to clock in at PkR1.1bn/6.05bn, changing by -15%/4% vs. the previous quarter. Going forward, weakening exchange rate alongisde ongoing field revitalization plans, complete recovery of production from Bolan East (muted during previous quarters due to flood damages) alongside returning Fertilizer plants from annual turnarounds during Dec’22 are expected to provide impetus to the topline in the quarters to come. Along with the result, we expect MARI to announce an interim dividend of PkR85/sh for the quarter ended 2QFY23.

HCAR – 3QMY23 earnings to clock in at PkR1.3/sh: We expect Honda Atlas Cars Limited (HCAR) to post a NPAT of PkR189mn (EPS: PkR1.3) in 3QMY23, declining by 58%YoY while recording a recovery against the loss of PkR385mn posted in the last quarter. This will take cumulative 9mMY23 earnings to PkR462mn (EPS: PkR3.2), dropping drastically by 80% when compared to earnings of PkR2.3bn (EPS: PkR16.2) in SPLY. The company has witnessed a flat performance in volume offtakes, with 5,477 CKD units sold in the quarter vs. 5,626 units in 2QMY23. Hence, revenue is expected to increase by 11%QoQ, as effective prices have increased for the quarter. On the flipside, a decline of 26%YoY is seen owing to volumes nearly halving compared to 3QMY22. Furthermore, margins are expected to improve to 3.8% on the back of the newly launched HR-V, contributing to ~23% of the sales mix in terms of units. Selling and distribution expenses are likely to be elevated consequently, as promotional expenses for the HR-V are likely to be costly, expected to clock in at PkR435mn. We expect Other Income to decline to PkR423mn, down by 46%QoQ despite the rising interest rates, as the company’s holdings in Cash & ST Investments had dipped significantly as Sep’22. Lastly, taxation is likely to normalize after the hefty charge of PkR544mn hit the company in 2QMY22, and is expected to clock in at PkR126mn for the quarter.

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