Topline Securities Limited - International Steels (ISL): 4QFY19 EPS Rs0.7, down 73% YoY; FY19 EPS Rs6.12, down 39% YoY

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International Steels (ISL): 4QFY19 EPS Rs0.7, down 73% YoY; FY19 EPS Rs6.12, down 39% YoY

International Steels Limited (ISL) posted 73% YoY decline in its 4QFY19 earnings as the company reported EPS of Rs0.70. Significant decline in earnings is mainly due to depletion in gross margin by 1.4ppts as dollar gained 31% during FY19 and increase in finance cost by 55% YoY.
Net sales of ISL improved by 14% YoY as the company sold around 140-145k tons of flat steel products, we estimate.
Finance cost increased 55% YoY during 4Q2019 as a result of higher interest rates coupled with higher debt borrowings.
Effective tax rate recorded in 4QFY19 is 65% due to certain tax adjustments on the back of reversal of the tax credit booked on recent expansion, we believe.
Key risks to company includes 1) dumping from countries not protected by anti-dumping duties 2) slowdown in economy and 3) further devaluation of PKR.

19/08/2019 1 EN

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Topline Securities Limited

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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International Steels (ISL): 4QFY19 EPS Rs0.7, down 73% YoY; FY19 EPS Rs6.12, down 39% YoY

Pakistan Strategy: Foreign selling at PSX; Will this trend continue in 2021?

Pakistan Strategy: Pakistan Outlook 2021 based on Topline Poll

Pakistan Automobiles: Car sales (including KIA) up ~63% YoY in Nov-2020

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