Topline Securities Limited - Pakistan Petroleum (PPL): 3QFY19 EPS Rs6.1 +24% YoY (-16% QoQ); (Below expectations)

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Pakistan Petroleum (PPL): 3QFY19 EPS Rs6.1 +24% YoY (-16% QoQ); (Below expectations)

PPL’s reported lower than expected earnings during the outgoing quarter. This deviation from our estimates was mainly on account of higher than expected exploration expenses.
During the outgoing quarter, PPL’s revenues grew by a decent 31% YoY, led mainly by avg. 20% PKR devaluation against the greenback.
To note, Arab Light crude prices during the outgoing quarter declined by 3% to US$63.8/bbl while oil and gas production were up ~3% and ~2%, respectively.
During the outgoing quarter, PPL’s exploration charges grew by 68% YoY, mainly owing to dry well costs, we believe.
In 9MFY19, sales of the company were up 30% YoY while earnings grew by 32%.
During 9MFY19, PPL’s other income surged by 16%. This was mainly on the back of exchange gain on foreign currency thanks to PKR devaluation against US$.
We flag 1) long-term volatility in international oil prices, 2) delay in key projects and 3) significant exploration and development cost as key risks for PPL.

30/04/2019 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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Pakistan Petroleum (PPL): 3QFY19 EPS Rs6.1 +24% YoY (-16% QoQ); (Below expectations)

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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