Hascol Petroleum (HASCOL): 2Q2018 EPS Rs2.06, down by 26% YoY; DPS Rs 3.5/share (Below expectations)
- Hascol Petroleum (HASCOL) announced earnings of Rs2.06/share during 2Q2018, down by 26% YoY due to exchange losses incurred by company on foreign payables amidst rupee devaluation (amounting to Rs1.4bn). Total exchange losses during 1H2018 clocked in at Rs1.9bn.
- Company reported 55% YoY growth in net revenues to Rs66bn during 2Q2018 due to higher petrol and diesel prices and increase of around 19% YoY in total volumetric sales.
- During 2Q2018, gross profit of the company surged by 90% YoY to Rs3bn due to higher volumetric sales & likely inventory gains, while admin and distribution cost was increased by 53% and 27%, respectively.
- Finance cost of the company increased to Rs241mn, up by 62% YoY due to higher debt borrowing by the company coupled with higher interest rates.
- Key risks to the stock includes: 1) rise in pump prices & slowdown in sales growth, 2) rupee depreciation & inability of the company to pass on the impact, 3) volatility in oil prices and inventory losses, & 4) increasing competition.
Hascol Petroleum Limited is a Pakistan-based company, which is engaged in procurement, storage and marketing of petroleum and related products. The Company is involved in the sale of petroleum products, such as fuel oil, high speed diesel, gasoline, Jet A-1, liquefied petroleum gas (LPG) and lubricants. The Company offers products, such as Tiger Super, Rocket Diesel and Furnace Oil. The Company offers Fuchs Lubricants products, which include corrosion preventives, quenching oils, industrial lubricants, open gear lubricants, greases, automotive oil and metal working fluids. The Company also markets LPG as an automotive fuel through its retail network. The Company is engaged in owning, leasing and renting oil storage facilities, as well as importing petroleum products. The Company has storage facilities at Machike, Shikarpur and Daulatpur. The Company sells its product to dealers, government agencies and autonomous bodies, independent power project and other corporate customers.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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