Hascol Petroleum (HASCOL): 4Q2018 LPS Rs7.2 v. EPS of 1.7 during 4Q2017 Bonus 10% (Below expectations)
- Hascol posted loss of Rs7.2/share during 4Q2018, higher than our expectations of Rs -3.0/share due to higher distribution cost (+45% YoY) despite 38% YoY decline in volumetric sales during 4Q2018.
- Gross Profit of company clocked in at Rs2bn, down 30% YoY, in line with our expectations. Net sales of company remained flat despite 38% YoY lower volumes as Petrol/Diesel prices were up 25%/30% during 2018.
- 2018 earnings remained were down 85% YoY to Rs1.1 per share on account of lower volumes (down 4% YoY in 2018) and exchange loss of Rs Rs3.9bn (or Rs21.5 per share pretax), up 390% YoY due to rupee devaluation of 26% during 2018.
- Finance cost of the company increased 179% YoY to Rs542mn during 4Q2018 due to increase in overall debt borrowing and higher interest rates.
- Other expenses of company during 2018 were down 62% YoY, while other income was up 7% YoY
- Key risks to the stock includes: 1) higher than expected devaluation, 2) slowdown in economy, 3) inventory losses, & 4) increasing competition.
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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