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MARI, HUBC & FATIMA Result Previews, (AKD Daily Oct 25 2023)

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MARI, HUBC & FATIMA Result Previews

 

MARI – Earnings to clock in at PkR140.4/sh in 1QFY24: Mari Petroleum Company Limited (MARI) is scheduled to post 1QFY24 earnings on Thursday, wherein we expect the company to report PAT of PkR18.73bn for the quarter (EPS: PkR140.4), up 18%/47% on QoQ/YoY basis. The rise in the bottom line is primarily due to higher production from the company's main reservoir, i.e. MARI field, which saw a 4.2%QoQ increase (incremental production predominantly sold at higher prices). Overall, total hydrocarbon production experienced a slight uptick of 1.6%QoQ, alongside modest depreciation of the avg. PkR/USD parity (2.1%QoQ) during the period. Company’s crude production fell by ~12%QoQ, largely due to declines in the Bolan East area. On the expenses side, we expect exploration expenses to amount to PkR4.26bn, changing by -34%/+209% QoQ/YoY, largely due to drilling activities in Waziristan and Kohlu blocks, however, on the lower end due to no significant dry wells during the quarter. Overall, MARI remains our top pick from the sector, with a June’24 target price of PkR2,750/sh, offering upside potential of 73% over the last close.

 

HUBC – 1QFY24 earnings to clock in at PkR13.24/sh: We expect The Hub Power Company Limited (HUBC) to post NPAT of PkR17.1bn (EPS: PkR13.24) in the first quarter of FY24, up 89%YoY, while down by 28%QoQ compared to PkR23.9bn (EPS: PkR18.4) during the quarter before. The aforementioned decline on a quarterly basis is largely due to one-off increases in Share of Profit from Associates (CPHGC insurance claim disbursement) during 4QFY23. Share of Profit from associates is expected to clock in at PkR8.85bn (up –40%QoQ/+187%YoY) during the current period. Generation profile of the company’s power plants were as follows: CPHGC (274Gwh, ↑3.2xQoQ), TEL (362Gwh, ↑1.2xQoQ), NEL (104Gwh, ↓35%QoQ), TNPTL (578Gwh, ↑1.3%QoQ) and LEL (62Gwh, ↓36%QoQ). Overall, we expect company to post revenue of PkR33.7bn (+14%YoY/+4%QoQ), reflecting a modest increase owing to no generation from the Hub plant in this quarter, as well as declining generation trends observed in subsidiary plants as well i.e. Narowal Electric and Laraib Energy. Gross margins are expected to improve to 53% for the quarter vs. the 52% recorded in 4QFY23. Finally, we expect the company to announce an interim dividend of PkR3.0/sh in the quarter. Overall, HUBC remains our top pick inside the power generation space, with a June’24 TP of PkR130/sh, alongside a promising dividend yield of 21%/24% for FY24/FY25, respectively.

 

FATIMA—3QCY23 earnings expected to clock in at PkR5.71/sh:FATIMA is going to announce their 3rd quarter results on Oct 25, 2023, wherein we expect earnings to clock in at PkR5.71/sh, reflecting a sizeable growth of 9x/2x QoQ/YoY. This is attributed to higher offtakes across the product portfolio, enhanced in part by the operations of DH plant (Sheikhupura) (urea: 41.7%/5.4% QoQ/YoY, CAN: 8.1%/16.6% QoQ/YoY, NP: 43.4%/2x QoQ/YoY and DAP: 2x/11x QoQ/YoY), rise in retention prices, as we havve seen during the quarter and better margins owing to unchanged gas price and subsidized LNG. Furthermore, we opine the company to earn finance income to the tune of PkR388mn (↓45.7%QoQ) and incur almost flat finance cost of PkR1.6bn (↑5.2%QoQ). Taxation is normalized for the quarter in our estimations, hence fetching a larger bottom-line of PkR5.71/sh vs. PkR0.59/sh (eroded by retrospective application of super tax in the previous quarter). We expect the company to pay out a dividend of PkR1.00/sh for the quarter.

 

 

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