PSO_1HFY20 unconsolidated EPS clocked in at PkR13.7, up 51.4%YoY, (AKD, Off the Analyst's Desk, Feb 18, 2020)
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PSO: 1HFY20 unconsolidated EPS clocked in at PkR13.7, up 51.4%YoY |
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· Pakistan State Oil (PSO) announced result for 1HFY20 where company posted unconsolidated PAT of PkR6.4bn (EPS: PkR13.7), up 51.4%YoY. For 2QFY20, unconsolidated PAT stood at PkR2.9bn (EPS: PkR6.2), declining sequentially by 17.6% mainly on the back of inventory losses against inventory gains recorded in 1QFY20 while on YoY basis, PAT increased by 41.6xYoY after heavy inventory losses in 2QFY19 led to a low base. · Though the bottom-line was in-line with our expectations, major deviations occurred under the head of gross profit and other income. Gross profit stood at PkR7.0bn for 2QFY20 (up/down 36.9/34.9% YoY/QoQ) on the back estimated inventory loss of PkR2.4bn against our expectation of inventory gains. Other income of PkR5.4bn for the quarter, against our expectation of PkR2bn, was attributable to company receiving late payment surcharges, in our view. · Finance cost for the quarter stood at PkR3.9bn on the back of increasing short term borrowings as company continues to battle with circular debt. PSO recorded exchange gain during the quarter after PKR appreciated by 1.0%. Effective tax rate for 2QFY20 clocked in at 40% against our expectation of 39%. · Stock faced severe pressure after the result announcement mainly as company didn't announce a dividend against market expectations of a payout, in our view. We maintain a Buy stance on the stock with our TP of PkR250/sh, implying an upside of 31%, where Sukuk issue to partially clear circular debt stands as a major trigger in near term. |
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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