NML in its FY19 results reported NPAT of PkR5,859mn (EPS: PkR16.66) vs. PkR4,097mn (EPS: PkR11.65) in FY18, up 43%YoY. The earnings growth was driven by both i) other income (+26%YoY) beefed up by one-off exchange gains and ii) core earnings (+2.4xYoY) though it remained below our expectations.
Key highlights of FY19 result:
· Topline grew by solid 18%YoY driven by both higher realized prices in PkR terms and higher volumes
· Margin at gross level jumped 173bpsYoY, benefiting from the up cycle tailwinds.
· Below the line expenses remained well under control (S&A as % of sales: 6.1% in FY19 vs. 6.5% in FY18).
· Other income soared 26%YoY primarily on account of one-off exchange gains, though payouts from portfolio companies were 10%YoY lower.
· Finance cost jumped 68%YoY driven both by interest rate hikes and higher working capital needs.
In 4QFY19, NML posted NPAT of PkR1,722mn (EPS: 4.90) vs. PkR1,332mn (EPS: PkR3.79) in 4QFY18, up 29%YoY. The earnings jump was primarily on account of higher other income, up 90%YoY, which was driven by higher materialization of dividend income and one-off exchange gains. Core textile earnings were poor during the quarter, with the company posting net loss of PkR0.5/sh vs. net profit of PkR0.95/sh at core level.
Key highlights of 4QFY19 result:
· Topline registered a growth of 8%YoY on account of higher realized prices in PkR terms
· Margin at gross level declined 178bpsYoY – likely hit by margin contraction in lower value added segments
· Finance cost jumped 90%YoY driven both by interest rate hikes and higher working capital needs.
Accompanying results, the company announced a final cash dividend of PkR4/sh, which was below our expectation of PkR5.5/sh. This is likely due to higher financing needs (both CAPEX and WC), as evident from today’s announcement of PkR4.09bn.
Nishat Mills is engaged in the business of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing, printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fiber and cloth, and to generate, accumulated, distribute and supply electricity.
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.
For 2QFY21 results, we expect our Textile Universe to post combined NPAT of PKR3.4bn, compared to a NPAT of PKR2.3bn in SPLY. The expected rise in profitability is inspired majorly from the sharp 18% yoy jump in Pakistan’s value-added textile exports during the period. ILP is expected to outperform both GATM and NML on a yoy basis, largely due to the strong growth in knitwear exports, up 23% yoy, alongwith similar increase in unit prices. NML, on the other hand, is expected to drag overall se...
Total exports in December 2020 clocked in at US$2.4bn compared to US$2.2bn in November, up 8% mom and 18% yoy. This took total exports in 1HFY21 to US$12.1bn (up 5% yoy). Textile exports (about 60% share in overall exports) clocked in at an all-time record of US$1.4bn in December – up 9% mom and a sharp 23% yoy. Pakistan’s textile exports outperformed both India (down 13% yoy in December in terms of readymade garments and made-ups) and Bangladesh (readymade garments down 3% yoy during 1H). To...
Total exports in November 2020 clocked in at US$2.2bn compared to US$2.1bn in October, up 3% mom and 8% yoy. This took total exports in 5MFY21 to US$9.8bn (up 2% yoy). Textile exports (about 60% share in overall exports) clocked in at a record US$1.3bn in November – up 9% yoy (flat mom). They compare well against that of India (down 1% yoy), while Bangladesh’s garments exports fell c.2% yoy in November. Total textile exports in 5MFY21 thus reached US$6.0bn (up 5%yoy) from US$5.8bn in same per...
Weekly Review KSE-100 remained volatile throughout the week, consolidating at 45,868pts after gaining 1,433pts or 3% month-to-date. Lackluster news on macro levels led to profit taking during the outgoing week, offsetting the result season driven exuberance. Major news included: (1) hike in Discos’ unified base tariff by PkR1.95/KWh vs. proposal of PkR3.34/KWh; Rs200bn impact calculated, indicating towards inflationary uptrend in upcoming months (2) decision to disconnect gas supply to captive power plants from Feb 01st and Mar 01st for industries and export o...
The MPC of the SBP — scheduled to meet tomorrow — is likely to maintain policy rate at 7.0% to support nascent economic recovery given uncertainties posed by resurfacing COVID cases domestically and internationally, capitalizing on room granted by transitory inflationary readings (mostly food supply led) and adequate external buffers. Jan’21 inflation is likely to stand at 6.1% vs. 7.97% in Dec’20, predominantly due to high base affect while tighter control on food prices (down 2.0%MoM) particularly out-of-season fall in eggs (15.6%MoM) and chicken prices (26.4%MoM) also played its part. Wi...
AKD Daily FFBL, FFC & EFERT: Result Previews FFBL is expected to outshine the other players in 4QCY20 amidst 59% YoY uptick in DAP volumes, along with uptrend in local DAP prices, GIDC elimination and a sharp decline in finance cost resulting in unconsolidated NPAT of PkR2.7bn (EPS: PkR2.90) as opposed to NLAT of PkR3.50bn (LPS: PkR3.75) in the same period last year. EFERT is expected to post a sequential decline in 4QCY20 earnings (EPS: PkR3.42) based on a decline in urea and DAP offtakes, combined with higher effective tax rate of 31% in 4Q as opposed as 2% in 3QCY20. For FFC, the 4QC...
AKD Daily ASTL: Demand recovery, but with caveats We raise our near term earnings estimates for ASTL, incorporating a swifter than expected recovery in demand and consequent better pricing dynamics leading to swifter margin recovery as well. At its core, we revise our earnings estimate for FY21/FY22F to PkR2.74/3.70 per sh (vs. PkR1.57/3.2 per sh previously). Consequently, our rolled over Dec’21 TP comes to PkR58 per sh (vs. 56 per sh previously). Although the company now enjoys considerable pricing power as evident from the recent consecutive hikes (two within 15 days), rising feedsto...
Monetary Policy Committee (MPC) of the SBP, in its meeting yesterday, expectedly decided to keep the policy rate unchanged at 7.0%. The status quo reflected the largely unchanged inflation outlook and risks to the nascent economic recovery from the recent surge in C19 caseload both domestically and globally. In a subsequent analyst briefing, SBP Governor alluded towards a resumption of the program in the next few weeks, with the authorities closing the gap on the contentious issues. According to him, the authorities have reached a consensus on the scale of adjustments (both in fiscal and ener...
Preliminary price trends for the month of Nov’20 signal relative ease in inflationary pressures, with headline inflation expected to decline to 7.88%YoY in Nov’20 vs. 8.91%YoY last month and 12.67%YoY in Nov’19. Sequentially, the index is likely to marginally move up by 0.39%MoM vs. 1.70%MoM in Oct’20 and 1.35%MoM in Nov’19. The expected decline in inflation is mostly on account of i) price normalization in certain food items (i.e. wheat, pulses, & rice), ii) lower energy prices (i.e. both gov’t administrated POL product prices and electricity prices on account of lower Fuel Charge Adjustmen...
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