Pakistan Oil & Gas_ Result Previews OGDC & HASCOL,
OGDC: 9MFY19 Result Preview
A OGDC to post an EPS of PkR20.53 for 9MFY19: OGDC reports 9MFY19 results tomorrow (26th April'19) where we expect cumulative NPAT to rest at PkR87.54bn (EPS:PkR20.35) climbing 54%YoY where key catalysts are: 1) ~15.8%YoY climb in realized oil prices, coupled with average exchange rate rise of 25%YoY, 2) modest production growth for gas (+3%YoY) moderated by decline in oil production (-3%YoY) keeping production stable, while LPG production grew ~15%YoY (due to Nashpa commencement), and 3) curtailed below the line exploration and admin expenses where treatment of a possible dry well and higher workover activity are paltry in comparison to SPLY. Accompanying the result is a likely payout of PkR2.5/sh, where we retain our BUY call on the stock. ​
HASCOL: 1QCY19 Result Preview
HASCOL to post an EPS of PkR0.49 for 1QCY19: After posting a dismal 4QCY18, we expect HASCOL to start the new year on a low with profitability declining by 87%YoY to PkR98mn (EPS: PkR0.49) for 1QCY19. The major dent to the profitability is expected to come from elevated finance costs of PkR548mn, up 182%YoY after short term borrowings stood at a mammoth ~PkR19bn as of Dec’18 while long term loans totaled to PkR5.4bn (D/E stood at 195% as of Dec’18). Interest cover for the quarter is expected at 1.31x vs. 1.37/9.01x for 4QCY18/1QCY18. Inventory losses of PkR234mn for the quarter will put additional strain on profitability while decline in volumes of 24%YoY will also contribute to the cause. Sequentially, the picture looks a lot better as significant exchange loss of PkR1.3bn for 4QCY18 contributed to a loss of PkR1.3bn (LPS: PkR6.53). Moving forward, we expect things to improve for the company as commissioning of the terminal at Port Qasim is expected to enhance the supply chain however the new entrants gaining market share will be the biggest challenge for the company.
AKD Research
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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