reports
Pakistan Fertilizer_Rabi season triggers uptrend in offtakes, (AKD Dai...
AKD Daily Pakistan Fertilizer: Rabi season triggers uptrend in offtakes, As per the numbers released by NFDC, urea offtake increased 4/13% MoM/YoY to 648K MT. The fertilizer numbers are on an uptrend given onset of Rabi season. This takes 8MCY21 urea offtake to 4.1mn MT, up 9%YoY, with increase in offtake more concentrated in 1HCY21 due to low base effect. Urea price, already up by c. PkR125/bag FYTD to PkR1,725/bag may sustain over 2HCY21 atleast, given supply side hiccups. DAP offtake in...
Pakistan Power_Circular debt settlement 2002 IPPs next in line, (AKD D...
AKD Daily Pakistan Power: Circular debt settlement 2002 IPPs next in line In a follow up to the MoUs signed with IPPs in Aug’20, CCoE has recently directed power division to clear the outstanding payments for the IPPs operating under 2002 PP, as per news reports. The second installment for 1994 and pre 1994 PP IPPs is expected in Nov’21; we believe 2002 IPPs’ first tranche of circular debt settlement will likely be clubbed with it. KAPCO received PkR13bn in cash in the first settlement and ...
OGDC_Best placed amid oil price upsurge , (AKD Daily, Sep 10, 2021)
AKD Daily OGDC: Best placed amid oil price upsurge OGDC continues to trade at undemanding valuations even as crude oil prices witness a 45% CYTD increase. Going forward, the oil demand outstripping production in 2022 is expected to be contained by strengthening US$. We therefore, incorporate oil prices for FY22/23 at US$68/60 per bbl and USD PkR exchange rate of 163/171 in our projections. OGDC stands out in the E&P sector with a diversified production base, where c. 70% of oil and gas prod...
Pakistan Fertilizer_Jul'21 urea offtake; FFC & FFBL lead the pack , (A...
AKD Daily Pakistan Fertilizer_Jul’21 urea offtake; FFC & FFBL lead the pack As per the numbers released by NFDC, urea offtake increased 9%YoY, but exhibited a decline of 10%MoM to 621K MT. This takes 7MCY21 urea offtake to 3.5mn MT, up 8%YoY. The overall urea inventory closed at 321K MT down 26%MoM, at par with the levels witnessed during the same period last year. Urea price, already up by c. PkR125/bag FYTD to PkR1,725/bag may sustain over 2HCY21 atleast, given supply side hiccups. DAP o...
Pakistan Fertilizer_Supply disruptions to drive fertilizer prices high...
AKD Daily Pakistan Fertilizer: Supply disruptions to drive fertilizer prices higher Fertilizer prices seem to be on an uptrend, with our channel checks suggesting another PkR50/bag hike w.e.f 06th Aug’21 in urea prices to PkR1,725/bag announced by Fauji Fertilizer Company Ltd (FFC). The recent supply side disruptions as key Chinese manufacturers temporarily suspend fertilizer exports to assure supplies for domestic market since 01st Aug’21 may keep fertilizer prices on an uptrend. We the...
FFBL_FFC & EFERT_Result Previews 2QCY21 (AKD Daily, Jul 26, 2021)
AKD Daily FFBL, FFC & EFERT: Result Previews 2QCY21 FFBL – Sequential dip on absence of dividend income: Fauji Fertilizer Bin Qasim Ltd (FFBL) is expected to post 2QCY21 unconsolidated NPAT of PkR793mn (EPS: PkR0.61), as opposed to NLAT of PkR1.16bn (LPS: PkR0.90) in the same period last year. The turnaround in earnings is expected on the back of (i) 14% YoY increase in revenue, courtesy uptrend in local urea and DAP prices, (ii) uptick in gross margins expected at 21% in 2QCY21 vs. 13% in 2QC...
Pakistan Fertilizer_ Faujis on a march ahead! (AKD Daily, Jul 08, 2021...
AKD Daily Pakistan Fertilizer: Faujis on a march ahead! We revisit our investment case on Fauji Fertilizer Bin Qasim Ltd (FFBL) and Fauji Fertilizer Company Ltd (FFC) on the back of continued uptrend in international fertilizer prices. DAP/urea prices in international markets are currently at US$650/420 per MT, translating into local price of PkR6,400/4,200 per bag, respectively. Based on the aforementioned bull cycle, we incorporate DAP primary margins for FFBL at US$190/MT for CY21, which...
Pakistan Fertilizer_May'21 offtakes on an uptrend, (AKD Daily, Jun 29,...
AKD Daily Pakistan Fertilizer:May’21 offtakes on an uptrend, As per the numbers released by NFDC, urea offtake increased 59/105% MoM/YoY to 492K MT. This takes 5MCY21 urea offtake to 2.2mn MT, up 46%YoY. The increase in offtake can be attributed to the low base effect, where increase in offtake in 5MCY21 is led by EFERT (up 154%YoY). The overall urea inventory increased to 612K MT (30% of May’21 urea offtake) up 15%MoM, but still below the levels witnessed during the same period last year. ...
EPCL_Margins upcycle continue amid expansion, (AKD Daily, Jun 24, 2021...
AKD Daily EPCL: Margins upcycle continue amid expansion We revisit our investment case on Engro Polymer Chemicals Ltd (EPCL), incorporating higher than expected PVC ethylene margins in 2QCY21. Our annual margin assumptions now stand at US$740/MT for CY21 vs. US$670/MT assumed earlier. For 2QCY21 PVC ethylene margins clocked in at ~US$1,000/MT, up 19% QoQ on the back of persistent PVC supply disruption and soft ethylene prices. The confluence of multi-year high margins and PVC Line III commi...
EFERT_Price hikes outweigh potential concessionary GSA end, (AKD Daily...
AKD Daily EFERT: Price hikes outweigh potential concessionary GSA end We revisit our investment case on Engro Fertilizers Ltd, incorporating (i) urea price of PkR1,675 per bag for CY21F onwards, (ii) non-concessionary gas rates from 3QCY21 onwards and, (iii) unwinding of discount on GIDC provision over CY21-24F.To recall, EFERT recorded GIDC re-measurement impact of PkR2.12bn in 4QCY20, as per IFRS 9, which is expected to be unwound over CY21-24F. On pricing front, EFERT announced urea pri...
- Shahrukh Saleem
Pakistan Power_The much awaited first tranche finally arrives!, (AKD D...
AKD Daily Pakistan Power: The much awaited first tranche finally arrives! In the first installment of latest circular debt clearance, Government has settled 40% of the overdue receivables of PkR200bn for listed IPPs while the remainder receivables are expected to be settled by Dec’21. In case of KAPCO, which has received ~PkR39bn in settlement, it will most likely divert some portion of the settlement amount in clearing liabilities (taking cue from Energy Sukuks). A downside risk to payouts...
Pakistan Fertilizer_Apr'21 urea offtake increase 28%YoY, (AKD Daily, M...
AKD Daily Pakistan Fertilizer: Apr’21 urea offtake increase 28%YoY As per the numbers released by NFDC, urea offtake declined 10% MoM , but were up 28%YoY to 309K MT. The sequential decline in numbers was witnessed industry wide due to seasonality factor, except for EFERT which witnessed 17/178% MoM/YoY uptick, due to a low base effect in the same period previous year. The overall urea inventory declined 38%YoY to 530K MT vs. ~854K MT in Apr’20, due to staggered decline in urea price after...
- Shahrukh Saleem
Pakistan Power_A much needed first dose of liquidity, AKD Daily, May 1...
AKD Daily Pakistan Power: A much needed first dose of liquidity After a delay of three months since the payments to the IPPs became due, the federal cabinet has finally accorded approval to the clearance of first installment to the IPPs. The first installment is expected to be received by 7th Jun’21 latest. Some of the best placed bets in the power sector on upcoming payments could be KAPCO, followed by PKGP and ALTN, for whom liabilities amount to 46/33/20% of the receivables, respectively...
HUBC_3QFY21 EPS of PkR6.61 – (above expectation) , (AKD, Off the Analy...
HUBC: 3QFY21 EPS of PkR6.61– (above expectation) Hub Power Company Ltd (HUBC) announced higher than expected 3QFY21NPAT of PkR8.6bn (EPS: PkR6.61), up 19/5% YoY/QoQ. This takes the 9MFY21NPAT to PkR24.92bn (EPS: PkR19.21), up 37%YoY. For 3QFY21 alone, a steep 39%YoY decline in finance cost amid low interestrates was somewhat offset by higher effective tax rate of 12% vs. 6% in thesame period last year (25% WHT on dividend income from 46% ownedCHPGC). However, 7%YoY higher contribution from C...
FFC_1QCY21 EPS clocked in at PkR4.57 - (Inline expectation), (AKD, Off...
AKD, Off the Analyst's Desk FFC: 1QCY21 EPS clocked in at PkR4.57 - (Inline expectation) Fauji Fertilizer Company Ltd (FFC) announced 36% YoY higher NPAT of PkR5.82bn (EPS: PkR4.57) in 1QCY21, in line with our expectation. The YoY increase earnings is majorly attributable to 58%YoY increase in other income, courtesy dividend announced by AKBL and, increase in short term investment in anticipation of commencement of GIDC payments as per Supreme Court’s Aug’20 verdict. While revenues increa...
FFBL_1QCY21 EPS clocked in at PkR0.98 - (Below expectation), (AKD, Off...
AKD, Off the Analyst's Desk FFBL: 1QCY21 EPS clocked in at PkR0.98 - (Below expectation) Fauji Fertilizer Bin Qasim Ltd (FFBL) announced 1QCY21 unconsolidated NPAT of PkR1.27bn (EPS: PkR0.98), as opposed to NLAT of PkR3.05bn (LPS: PkR2.36) in the same period last year. The earnings was below our expectation due to lower than expected gross margins. Nevertheless, the bottomline remained in green during 1Q, as opposed to losses in 1Q over last 5 years due to seasonality factors, further worse...
Pakistan Fertilizer_Seasonality leads to a dip in urea offtake, (AKD D...
AKD Daily Pakistan Fertilizer: Seasonality leads to a dip in urea offtake As per the numbers released by NFDC, urea offtake declined 16% MoM to 343K MT. The sequential decline in numbers was witnessed industry wide due to seasonality factor. EFERT remained at the forefront, due to a low base effect in the same period previous year. The overall urea inventory improved to 297K MT vs. ~130K MT in Feb’21, but still is down 50%YoY. The GoP’s decision to supply LNG to hitherto closed fertilizer p...
EPCL & FFC - 1QCY21 Result Previews, (AKD Daily, Apr 16, 2021)
AKD Daily EPCL & FFC - 1QCY21 Result Previews EPCL to post 1QCY21 EPS of PkR4.24: Engro Polymer & Chemicals Ltd’s (EPCL) board is scheduled to meet to today announce its financial result. We expect EPCL to post 1QCY21 NPAT of PkR3.90bn (EPS: PkR4.26), as compared to PkR193mn (EPS: PkR0.21) in the same period last year. To recall, EPCL’s PVC production and sales took a hit in 1QCY20 due to plant disruption. On YoY basis, (i) 91%YoY increase in revenues, (ii) gross margins expected to clock in a...
FFBL & EFERT - 1QCY21 Result Previews, (AKD Daily, Apr 15, 2021)
AKD Daily FFBL & EFERT - 1QCY21 Result Previews, FFBL – NPAT to post sequential decline but a turnaround on YoY basis: Fauji Fertilizer Bin Qasim Ltd (FFBL) is expected to post 1QCY21 unconsolidated NPAT of PkR1.41bn (EPS: PkR1.09), as opposed to NLAT of PkR3.05bn (LPS: PkR2.36) in the same period last year. The turnaround in earnings is expected on the back of (i) 31% YoY increase in revenue, courtesy uptrend in local DAP prices, (ii) decline in feed/ fuel gas prices, courtesy GIDC eliminatio...
Pakistan Chemical_EPCL_Continuing to push above its weight, (AKD Detai...
Engro Polymer & Chemicals Limited (Detailed Report) Continuing to push above its weight We initiate coverage on Engro Polymer & Chemicals Ltd (EPCL) with a Buy call and a TP of PkR72/sh (upside: 32.0% at LDCP), citing significant near term catalysts including (i) uptrend in PVC Ethylene margins and (ii) 100K MT PVC expansion (50% of existing capacity; CoD: 1QCY21). The PVC ethylene margins have recently surpassed ~US$1,000/MT in Mar’21 on the back of force majeure declared by PVC capaciti...
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