EUR 9.10 For Business Accounts Only

Pakistan Fertilizer - ENGRO FFBL FFC 3QCY23 Result Previews, (AKD Daily Oct 23, 2023)

AKD Daily

 

Pakistan Fertilizer - ENGRO FFBL  FFC 3QCY23 Result Previews

 

ENGRO (consolidated) 3QCY23 earnings expected at PkR22.57/sh: ENGRO will announce its 3QCY23 results on Oct 23, 2023, wherein we expect the PAT attributable to the company of  PkR12.1bn (EPS: PkR22.57/sh). The company's topline is expected to increase to PkR130.5bn owing to above expectations performance by EFERT (↑72%QoQ), followed by EPCL (↑31%QoQ) . We expect Engro ELENGY to have benefitted from increased LNG imports during the quarter, trickling down onto ENGRO’s bottomline. Further we opine ENGRO to declare a dividend of PkR2/sh in line with last quarter, due to relatively lower cash and cash equivalents balance as at 2QCY23. However, adding our expectation, total 9MCY23 dividend will come out to PkR44/sh.

 

FFBL—3QCY23 EPS of PkR3.45/sh expected: FFBL will announce their 3QCY23 result on Oct, 24th and we expect a turnaround from lackluster performances in the past few periods. We believe revenues will clock-in at PkR70.1bn (↑99%QoQ), due to 1.4xQoQ increase in DAP offtakes, coupled with multiple price increases of both DAP and urea. Further, we estimate a ~370bps hike in gross margins over unchanged gas prices during the period, and better retention prices. Finance cost is expected at PkR2.4bn, down marginally QoQ owing to lower long and short term borrowings last quarter. Other income estimations stand lower at PkR1.3bn (↓49%QoQ) due to an absence of dividend income, but healthy, consistent cash and short term borrowings shall provide for a healthy finance income.

 

FFC– 3QCY23 earnings to clock in at PkR7.49/sh: FFC will announce its result on Oct 25th, 2023, wherein we expect earnings to increase ~78%, on the back of higher retention prices, 8%/27% QoQ/YoY and 6%/3x QoQ/YoY increase in urea and DAP offtakes respectively, complemented by unchanged gas prices. We expect revenues to clock-in at PkR42.1bn and gross margins to remain higher at ~45%. We estimate other income to come in at PkR2.3bn amidst minor fluctuations in cash and cash equivalents period over period, although finance cost is expected to remain almost flattish at PkR1.2bn owing to higher interest rates but cushioned in part by a fall in overall borrowings. Overall, we expect margins to remain in line with recent past periods, but net margin to improve to 23% vs. 15% last quarter owing to normalization of taxation (last quarter saw a retrospective imposition of super tax). Alongwith the result we expect the company to pay out PkR6.75/sh  dividend for the quarter, taking total dividend for 9MCY23 to PkR14.16/sh.

 

 

AKD Research