POL_FY22 Result Review - Earnings surprise on lower-than-expected taxation, (AKD Off the Analyst's Desk Aug 16, 2022)
AKD, Off the Analyst's Desk
POL: FY22 Result Review - Earnings surprise on lower-than-expected taxation
Pakistan Oilfields Limited (POL) reported its earnings earlier today, announcing NPAT of PkR25,935mn for FY22, higher by 95% compared to the same period last year. For the final quarter, the company reported earnings of PkR8,439mn (EPS: PkR29.73), higher by 1.28xYoY and 28%QoQ. The result was higher than our expectations on account of lower-than-expected taxation charge during the final quarter. Along with the result, the company reported a cash dividend of PkR50/sh in addition to the PkR20/sh announced earlier.
- POL reported net sales of PkR51,945mn for FY22, higher by 44%YoY. POL’s topline grew by 74%YoY/12%QoQ to PkR14,943mn in 4QFY22, driven by higher crude oil prices, along with a weaker PkR against the USD during the period.
- The company reported finance costs of PkR 5,549mn for FY22, higher by 20.4xYoY. For 4QFY22, the company reported finance costs of PkR2,363mn, higher by 2.5xYoY and 2xQoQ.
- POL’s PBT clocked in at PkR36,987mn in FY22, higher by 80%YoY, majorly driven by the growth in the company’s topline, along with a relatively subdued increase in operating costs. For the quarter, the company reported PBT of PkR12,164mn, higher by 97%YoY and 20%QoQ.
- The company reported an effective tax rate of 25.1% for the final quarter, compared to 30.3% in the earlier quarter. Our estimates incorporated a higher tax rate on account of super tax.
- We have a Buy rating on the stock with a Target Price of PkR570/sh, posing an upside potential of 35%. The stock also offers a dividend yield of 17%.
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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