reports
- Rahul Hans
- Raza Jafri
Pakistan Strategy: Pakistan makes last-gasp effort to rescue the IMF p...
Pakistan is making a last minute effort to successfully complete the pending 9th review under the stalled IMF programme. The necessary adjustments are coming at a rapid pace, with Pakistan better aligning the FY24 Budget with IMF requirements, removing import restrictions, and increasing the Policy Rate by 100bps to 22%. Time is very short - the IMF programme runs out at the end of the month - but chances of the 9th review successfully concluding are now significantly higher in our view. Mark...
- Rahul Hans
Pakistan Economy: May CPI at new high of 38%, but monthly outturn is e...
National CPI for May 2023 clocked in at 38.0% YoY, broadly in line with our expectation of 37.8%. It has increased from 36.4% in April. On a MoM basis, CPI rose by 1.6%, compared with 2.4% in April. The deceleration in monthly inflation is driven by slower increase in Food, and Clothing & Footwear indices. Rural and Urban inflation came in at 42.2% and 35.1%, compared with 40.7% and 33.5% in April, respectively. Core inflation (NFNE): Urban core inflation in May accelerated to 20.0% YoY, from...
- Rahul Hans
Pakistan Fertilizer: April 2023 - Lower FFC offtake reduced industry v...
* Urea offtake in April 2023 reduced by 11% YoY and 17% MoM to c.408,000 tons. The MoM decline in volumes is due to off-season impact. The market share of EFERT and FFBL increased by 4/2 ppt YoY basis to 38%/9%, while the market share of FFC reduced by 7ppt YoY to 33%, amidst self-imposed measures to pause volumes due to price disparity. * During the month, Urea ex-factory price remained unchanged at PKR2,895/bag- this is the price where almost all companies were selling Urea except FFC...
- Rahul Hans
Pakistan Economy - April CPI inches up to a new high of 36.4%
* National CPI for April 2023 clocked in at 36.4% YoY, against our expectation of 37.1% and up from 35.4% in March. Rural and Urban inflation came in at 40.7% and 33.5%, compared with 38.9% and 33.0% in March. On a MoM basis, CPI rose by 2.4%, compared with 3.7% in March, driven majorly by changes in Food indices. * Core inflation (NFNE): Urban core inflation in April accelerated to 19.5% YoY from 18.6% in March (up 1.8% MoM). Rural core inflation has increased to 24.9% in April, higher...
- Rahul Hans
Lucky Cement: 3QFY23 Review - Resilient core profits despite sluggish ...
Lucky Cement (LUCK) has posted an unconsolidated NPAT of PKR4.0bn (EPS: PKR12.78) for 3QFY23, up 22% QoQ, but down 28% YoY. Earnings came in line with our projected EPS of PKR12.99. On a consolidated basis, LUCK has reported very strong net profits of PKR30.2bn (EPS: PKR67.11 in 3QFY23), up 2.8 YoY, much higher than our expected EPS of PKR37.92. The deviation is due to a one-off revaluation gain booked by LCI on remaining stake of NutriCo Morinaga and strong growth coming from the chemical bu...
- Rahul Hans
Nishat Mills: 3QFY23 Result Review - Earnings beat on higher other inc...
Nishat Mills Ltd (NML) has posted unconsolidated NPAT of PKR3.3bn (EPS: PKR9.39) in 3QFY23, down 10% QoQ and 4% YoY. The result came higher than our expected EPS of PKR8.55, where the major deviation stemmed from higher than expected other income. This takes 9MFY23 NPAT to PKR11.1bn (EPS: PKR31.67), up 23% YoY. KEY HIGHLIGHTS FROM 3QFY23 RESULT INCLUDE: * Revenue clocked in at PKR37.1bn, up 12% QoQ and 18% YoY. This is majorly due to higher local yarn sales and increased dyed-fabric & garmen...
- Rahul Hans
Pioneer Cement: 3QFY23 Review - Lower offtake reduced profits; in line
Pioneer Cement Ltd (PIOC) has posted NPAT of PKR950mn (EPS: PKR4.18) for 3QFY23 up 96% YoY but down 19% QoQ, in line with our expected earnings of PKR940mn (EPS: PKR4.14). 9MFY23 net profits stand at PKR2.7bn (EPS: PKR11.91), up 66% YoY. KEY HIGHLIGHTS OF 3QFY23 RESULTS: * Net sales have increased by 18% YoY but are down 11% QoQ to PKR9.1bn in 3QFY23. The QoQ decline in revenue is due to lower volumes by 14% to 0.68mn tons. We expected a topline of PKR9.7bn. * Gross margins have increas...
- Rahul Hans
Cherat Cement: 3QFY23 Review: Low volumes and margins hurt profit
Cherat Cement (CHCC) has posted 3QFY23 NPAT of PKR1.3bn (EPS: PKR6.55), up 19% YoY but down 18% QoQ. The result came in lower than our expected earnings of PKR1.6bn (EPS: PKR8.17), majorly due to lower than expected GMs. The company has announced interim cash dividend of PKR1.50/sh. This takes 9MFY23 NPAT to PKR4.3bn (EPS: PKR22.19), reflecting a growth of 25% YoY. KEY HIGHLIGHTS OF 3QFY23 RESULT: * Net revenues have increased to PKR9.3bn, up 19% YoY but down 11% QoQ. Despite the reduction i...
- Rahul Hans
Fauji Fertilizer: 1QCY23 Review - Higher margins deliver earnings surp...
Fauji Fertilizer Company Ltd (FFC) has posted unconsolidated 1QCY23 NPAT of PKR7.7bn (EPS: PKR6.08), up 48% QoQ and 24% YoY. The result is above our expected EPS of PKR5.53, where the major deviation has come from higher-than-expected gross margins. The result is accompanied by an interim cash dividend of PKR4.25/sh (we expected PKR4.70/sh). KEY RESULT HIGHLIGHTS FOR 1QCY23: * Net revenues have increased by 38% YoY and 21% QoQ to PKR36.4bn due to increase in Urea prices. We estimated topline...
- Rahul Hans
Kohat Cement: 3QFY23 Review - Lower margins cause a drag
Kohat Cement Co. Ltd (KOHC) has posted 3QFY23 NPAT of PKR1.6bn (EPS: PKR8.08), down 17% QoQ and 1% YoY. This is lower than our estimated EPS of PKR10.29, on lower-than-expected GM’s. This takes 9MFY23 net profits to PKR5.4bn (EPS: PKR26.70), up 16% YoY. KEY HIGHLIGHTS OF 3QFY23 RESULT: * Net Sales have increased by 17% YoY but down 9% QoQ to PKR10.0bn. Reduced dispatches caused the sequential decline in topline. We expected a topline of PKR10.8bn. * Gross margins have reduced significan...
- Rahul Hans
Fatima Fertilizer: 1QCY23 Review - Higher margins lead to earnings bea...
Fatima Fertilizer Company Ltd (FATIMA) has posted 1QCY23 NPAT of PKR4.3bn (EPS: PKR2.06) up 3% QoQ but down 24% YoY. The result came in higher than our expected EPS of PKR1.58 on higher than expected margins. KEY RESULT HIGHLIGHTS FOR 1QCY23: * Net revenues have increased by 15% YoY, but are down 37% QoQ, to PKR33.5bn (vs. our expectation of PKR37.4bn). The sharp QoQ reduction in sales is mainly attributed to reduction in Urea/NP volumes, coupled with reduction in NP prices during the quarte...
- Rahul Hans
Fauji Fertilizer Bin Qasim Ltd: 1QCY23 Review - Depressed margins and ...
Fauji Fertilizer Bin Qasim Ltd (FFBL) has posted unconsolidated NLAT of PKR5.4bn (LPS: PKR4.20) for 1QCY23, compared to NPAT of PKR614mn (EPS: PKR0.48) in 4QCY22. The loss came in higher than our expected loss of PKR2.45/sh. The deviation stemmed from lower GMs and higher-than-expected exchange losses. On a consolidated basis, the net loss is PKR4.6bn (LPS: PKR3.76) in 1QCY23 as compared to profits of PKR3.2bn (EPS: PKR2.47) in 1CY22. KEY HIGHLIGHTS OF 1QCY23 RESULT (UNCONSOLIDATED): * Net r...
- Rahul Hans
Pakistan Economy: March 2023 - Balance of Payments
CURRENT ACCOUNT TURNS POSITIVE – BELT TIGHTENING APPEARS TO BE WORKING PAKISTAN POSTS C/A SURPLUS OF US$654MN IN MAR’23 As per SBP data, Pakistan has reported current account Surplus of US$654mn in March’23 – first time since Nov’20 led by elevated remittances and exports. This has narrowed CAD down to US$3.0bn in 9MFY23 from US$13.0bn SPLY. During the month, Trade deficit shrunk by 9% MoM to US$1.6bn – the deficit is clearly not sustainable given the overall slowdown in the economy and short...
- Rahul Hans
Fauji Cement: 3QFY23 Review - Higher finance cost lead to slight earni...
Fauji Cement Company Ltd (FCCL) has posted NPAT of PKR1.6bn in 3QFY23 (EPS: PKR0.77), down 32% QoQ but up 21% YoY. The result came slightly lower than our expected EPS of PKR0.84, where deviation stemmed from higher-than-expected finance cost. KEY RESULT HIGHLIGHTS FOR 3QFY23: * Net Sales were up 40% YoY but down 4% QoQ to PKR18.2bn. The sequential decline in revenue is majorly contributed by 22% decline in sales volumes, offset to a great extent by the increase in local cement prices. We ex...
- Rahul Hans
DG Khan Cement: 3QFY23 Review - Higher other income leads to earnings ...
DG Khan Cement (DGKC) has posted unconsolidated NPAT of PKR1.2bn (EPS: PKR2.69) in 3QFY23, up 118% QoQ but down 18% YoY. The result came higher than our expected EPS of PKR2.17, where elevated other income led to the major deviation. This takes 9MFY23 NPAT to PKR2.1bn (EPS: PKR4.82), down 42% YoY. KEY HIGHLIGHTS OF 3QFY23 RESULT: * Net sales have increased by 13% QoQ and 15% YoY to PKR18.3bn. The sequential increase in sales is contributed by both increase in exports and a surge in local cem...
- Rahul Hans
Maple Leaf Cement: 3QFY23 Review - Earnings decline on higher expenses...
Maple Leaf Cement (MLCF) has posted 3QFY23 unconsolidated NPAT of PKR1.5bn (EPS: PKR1.40), down 36% QoQ but up 57% YoY, slightly lower than our expected EPS of PKR1.54. Lower-than-expected GMs and elevated distribution expenses explain the deviation. This result takes 9MFY23 net profits to PKR5.1bn (EPS: 4.71), up 41% YoY. On a consolidated basis, MLCF has posted NPAT of PKR1.9bn (EPS: PKR1.75) in 3QFY23, lower than our expected net profit of PKR2.3bn (EPS: PKR2.12). KEY HIGHLIGHTS FOR 3QFY23...
- Rahul Hans
Engro Fertilizers: 1QCY23 Review - Earnings miss on higher-than-expect...
EFERT has posted consolidated NPAT of PKR4.4bn for 1QCY23 (EPS: PKR3.30), down 31% QoQ and 20% YoY. The result has come in lower than our expected EPS of PKR4.11, with higher COGS amid inventory losses on imported fertilizer leading to the deviation, in our view. EFERT also announced an interim cash dividend of PK3.50/sh – below our expectation of PKR4.10/sh. Key highlights from 1QCY23 result: * Net Sales have increased by 19% YoY but are down 5% QoQ to PKR44.0bn, higher than our expected to...
- Rahul Hans
Pakistan Fertilizer- 1QCY23 Result Previews
HIGHER GAS PRICES AND EXPENSES WILL REDUCE PROFITS IMS Fertilizer Universe earnings are estimated to reduce by 23% QoQ to PKR12.7bn due to increased gas prices, lower Urea and DAP offtake and exchange losses particularly for FFBL. Industry Urea/DAP offtake is estimated to clock in at 1.62/0.26mn tons in 1QCY23, vs. 1.63/0.25mn tons in 1QCY22. Urea offtake declined amid lower production from EFERT and FFC due to plant breakdown and non-availability of RLNG based plants, while DAP volumes redu...
- Rahul Hans
Pakistan Cements: 3QFY23 Result Previews
BETTER PRICES AND MARGINS TO EXPAND PROFITABILITY IMS Cement Universe profitability is expected to increase by 9% QoQ and 50% YoY to PKR22.5bn in 3QFY23, mainly driven by margins expansion amid higher retention prices. LUCK may book one-off capital gain on its subsidiary LCI’s partial divestment of NutriCo Morinaga. The sector’s gross margins are expected to increase by 1.6ppt QoQ / 3.1ppt YoY to 27% in 3QFY23. Higher increase in cement prices relative to the increase in taxes and energy pric...
- Rahul Hans
Pakistan Economy – MPS Review - Another rate hike as the SBP chases i...
In line with our expectations, the SBP has increased the Policy Rate by 100bps to 21%, the highest in the last four decades. The rate hike comes on the heels of the latest CPI print crossing 35%, pushed up by recent measures such as the increase in fuel and energy prices. As per the SBP, real interest rates are now in positive territory on a forward looking basis. Given the increase is less than the 200bps expected by the street, the KSE100 may depict a kneejerk positive reaction. However, en...
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