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PPL, PIOC & LUCK - 1QFY24 Result Review, (AKD Off the Analyst's Desk Oct 30, 2023)

Pakistan Petroleum Limited (PPL) reported its 1QFY24 earnings earlier today, wherein the company posted Profit After Tax (PAT) of PkR29.62bn (EPS: PkR10.89) for the quarter, higher by 87%/13% on a QoQ/YoY basis—slightly above our estimate of PkR10.25/sh.

• The company’s posted its highest ever quarterly topline, clocking in at PkR77.45bn (up 6%/6% QoQ/YoY). The said incline on a quarterly basis is largely due to the absence of retrospective super tax during the period, alongside slight uptick in US$/PkR parity (up 2.1%QoQ) coupled with higher crude prices (up 12%QoQ).
• Significant accretion in the bottom was also majorly due to higher other income, which amounted to PkR3.75bn (up 57%QoQ), largely emanating from both local and FX short-term investments totaling to PkR67.6bn (as per latest financials).
• Company’s operating expenses remained relatively flat on a QoQ basis, ending at PkR12.29bn (vs. PkR11.9bn last quarter), up 3%QoQ.
• Exploration expenses clocked in at PkR2.0 during the quarter (down 5%QoQ), majorly due to no significant dry wells during the quarter. Finally, effective taxes for the period clocked in at 38% (vs. 57%/42% during 4QFY23/SPLY)

 

 

Pioneer Cement Limited (PIOC) announced its 1QFY24 results today, with the company posting NPAT of PkR934mn (EPS: PkR4.11) compared to a loss of PkR100mn (LPS: PkR0.44) in the previous quarter. To recall, the preceding quarter’s earnings were largely hampered by the impact of super tax’s retrospective implementation and deferred taxation. The result came largely in line with our expectations.

• Net sales of the company clocked in at PkR8.7bn vs. PkR8.4bn in the previous quarter, an increase of 4%QoQ. This rise is primarily attributed to the increase in retention prices (↑7%QoQ), offsetting the impact of a 2%QoQ decline in sales volume.
• Gross margins improved to 30.4%, up from 26.6% in the quarter before, primarily due to a decline in coal prices. Notably, ~ 50% of the company's power is also derived from coal-fired power plants.
• Operating expenses increased by 37%/104% QoQ/YoY, reaching PkR135mn, driven by higher distribution costs (due to the rise in fuel prices) and overall heightened inflation.
• Finance cost arrived at PkR950mn compared to PkR915mm in SPLY, an increase of 4%YoY where the impact of the increase in interest rates is offset by a decline in overall borrowings

 

 

Lucky Cement Limited (LUCK) has posted its 1QFY24 results earlier today, wherein the company reported unconsolidated earnings of PkR6.9bn (EPS: PkR22.1) vs PkR2.6bn (PkR8.3/sh) in the previous quarter (↑1.7xQoQ). The improvement is attributed to significant gross margin enhancement, high retention prices, and the absence of the retrospective impact of super tax. The consolidated earnings for the quarter clocked in at PkR56.5/sh, slightly below our expectations.

• Topline of the company clocked in at PkR29.4bn vs. PkR25.5/19.7bn in 4QFY23/SPLY (↑ 15%/49% QoQ/YoY). This significant increase is attributable to increase in sales volume (↑15%/41% QoQ/YoY) amidst recent expansion and increased retention prices (↑5%/10% QoQ/YoY).
• Gross margins have improved significantly to 36.9% vs. 27.7%/30.5% in 4QFY23/SPLY. This improvement can be possibly due to improved cost efficiencies and a decline in coal prices. We await further clarity for this significant improvement.
• Other income has almost doubled on the quarterly basis, clocking in at PkR3.2bn, primarily due to high dividend influx from LCI (Lucky Core Industries) following their divestment in Morinaga.
• On the consolidated basis, earnings clocked in at PkR56.5/sh vs. PkR37.7/17.4 per share in 4QFY23/SPLY, respectively. The quarterly increase in the earnings is primarily due to impact of super tax’s retrospective implementation and loss for LCI in the preceding quarter. Meanwhile, on an annual basis, the increase is primarily due to growth in earnings from LEPCL (Lucky Electric Power Company Ltd).