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Pakistan Textiles - ILP, NML, NCL & KTML 2QFY24 Result Previews, (AKD Daily Feb 20, 2024)

Pakistan Textiles - ILP,  NML, NCL & KTML 2QFY24 Result Previews

 

ILP– 2QFY24E earnings to clock in at PkR3.6/sh: ILP is expected to announce its 2QFY24E earnings today, wherein we expect company to post PAT of PkR5.0bn (EPS: PkR3.6) vs. earnings of PkR6.0bn (EPS: PkR4.3) in the preceding quarter, a decline of 16.5%QoQ. The decline in the earnings is on the back of decline in the gross margins and exchange loss amid rupee appreciation. Topline is expected to reach at PkR37.7bn, down 2%QoQ, with the decrease in international sales prices offsetting the impact of increased sales volumes. Likewise, gross margins are expected to shrink to 31.0% vs 33.1% in the previous quarter, primarily due to declining international sales prices and rising energy costs, including RLNG prices and grid costs. Additionally, other income is forecasted to decrease by 72%QoQ to PkR37mn, mainly due to the absence of exchange gains. Meanwhile, finance costs are projected to remain stable at PkR2.2bn, as increased borrowing is expected to offset the decline in the KIBOR rate. Overall, half-year earnings is expected at PkR7.9/sh vs. 3.3/sh in SPLY, an increase of 142%YoY.

 

NML—EPS is expected to clock in at PkR4.0 for 2QFY24E: NML's board is set to announce their 2QFY24E result sometime in current month, wherein the company is expected to post earnings of PkR1.4bn (PkR4.0/sh) vs. PAT of PkR4.5bn (PkR12.9/sh) in the preceding quarter, where the decline in earnings is primarily attributable to the absence of dividend income from its power associates. Topline for the quarter is expected to clock in at PkR39.7bn vs. PkR40.0bn in the quarter before, a decline of 1%QoQ. This decline is attributable to exports remaining flat in the previous quarter. Gross margins are expected to improve to 12.8% vs. 12.4% in 2QFY24E, primarily due procurement of cotton at better rates. Other income is expected to decline 70%QoQ to PkR1.7bn, due to aforementioned absence of dividend income from power associates (LPL, PKGP & NPL). The company's finance cost is expected to decline by 7%QoQ to PkR2.2bn, due to decline in the ST-borrowings.

 

NCL—EPS of PkR0.9 is expected in 2QFY24E: NCL is expected to announce its 2QFY24E results in current month, where earnings of PkR226mn (EPS: PkR0.9) is expected compared to PAT of PkR517mn (EPS: Pk2.2). This noteworthy quarterly decline in earnings is primarily attributed to decline in gross profits and increase in the financial charges. Topline is expected to increase by 1%QoQ to PkR24.6bn due to expected increase in local sales, whereas exports are expected to remain flat QoQ. Gross margins are expected to shrink to 12.9% due to decline in the yarn rates in the said quarter. Additionally, finance cost is expected to increase by 10%QoQ due expected increase in the ST-borrowings owing to high working capital requirement. Overall, PAT for the 1HFY24 will accumulate to PkR3.1/sh vs. LAT of PkR7.6/sh in SPLY.  

 

KTML— 2QFY24E’s standalone EPS is expected at PkR2.96: KTML’s board is scheduled to announce its 2QFY24E financial result tomorrow, wherein we expect company to post unconsolidated earnings of PkR798mn (EPS: PkR2.96) vs. PkR982 (EPS: PkR3.65) is the previous quarter, a decline of 19%QoQ. The said quarterly decline is majorly attributable to the gross margins contraction and increase in the other income. Topline is expected to clock in at PkR14.1bn vs. PkR14.4bn in the quarter before, down 2%QoQ owning the stable sales volumes and rupee appreciation. Gross margins is expected to report at 18.1% vs. 19.0% in 1QFY24, where the contraction is largely attributable to the higher energy costs. Furthermore, finance cost is expected to increase by 5.3%QoQ to PkR847mn owing to increase in the total borrowings. That being said, consolidated earnings is expected at PkR7.5/sh vs. PkR8.7/sh in 1QFY24, down 14%QoQ.