reports
- Yusra Beg
Friesland Campina Engro Pakistan: 4QCY21 review – High distribution co...
FCEPL has reported 4QCY21 a loss after tax of PKR155mn (LPS: PKR0.20), similar to a loss of PKR145mn (EPS: PKR0.19) SPLY. We attribute higher distribution costs and seasonally higher raw material costs as the primary contributors, largely offsetting strong sales delivery (PKR13bn, up 14% yoy). CY21 NPAT has clocked in at PKR1.8bn (EPS: PKR2.35), up10x yoy due to a strengthening product line and better margins. FCEPL continues to display strength in sales – rising 14% yoy to PKR13.4bn. This is...
- Yusra Beg
Friesland Campina Engro Pakistan: On the rebound – Upgrade to Buy
We increase our CY21-25f EPS estimates by 14% on average on accelerated sales/GMs in the coming years. While our Dec 2022 TP remains unchanged at PKR110/sh courtesy higher risk-free rate (11.0%), valuations appear compelling following the c. 28% stock price correction (from CY21td high). This leads us to raise our stance by one notch to Buy. FCEPL has consistently introduced new products; which, together with reinstatement of its leadership position in the UHT milk segment, and robust gross m...
- Yusra Beg
Friesland Campina Engro Pakistan: 3QCY21 review – earnings dip seasona...
FCEPL has reported 3QCY21 NPAT of PKR544mn (EPS: PKR0.71), a massive jump from PKR29mn (EPS: PKR0.04) SPLY. This takes 9MCY21 NPAT to PKR1.96bn (EPS: PKR2.55), up over 6x yoy. The result is however lower by 37%qoq primarily due to seasonality. 3QCY21 KEY RESULT HIGHLIGHTS INCLUDE: * FCEPL continues to report record sales - rising 15%yoy to PKR14.0bn. This is led by strong volumetric growth in all categories - particularly Olpers, complemented by strong marketing campaigns on conversion aware...
- Yusra Beg
Friesland Campina Engro Pakistan: 2QCY21 review – Highest quarterly sa...
FCEPL has posted 2QCY21 NPAT of PKR867mn (EPS: PKR1.13), double the earnings reported SPLY. This takes 1HCY21 NPAT to PKR1.4bn (EPS: PKR1.84), up nearly 5x yoy. FCEPL continues to impress with consistently high sales delivery (PKR13bn in 2Q), while inflationary pressures have been largely passed on to consumers with GMs rising to 21% vs. 19% SPLY. 2QCY21 KEY RESULT HIGHLIGHTS INCLUDE: * FCEPL reported a sharp 26%yoy growth in sales to PKR13bn in 2Q. These are the highest quarterly sales to b...
- Yusra Beg
Friesland Campina Engro Pakistan: Zero rating is a big catalyst but la...
We raise our CY21-25f EPS estimates for FCEPL by 14% on average after incorporating recent budgetary changes for milk producers which leads us to raise our Dec’21 TP to PKR110 (vs. PKR75/sh previously). That said, the c. 40%CY21td price run-up leads us to maintain a Neutral rating. The Government agreed to reinstate “Zero Rating status” on UHT milk and nutritional milk powder which was previously abolished in the Federal Budget 2016-17. This is estimated to incur annual tax savings of c. PKR4...
- Yusra Beg
Friesland Campina Engro Pakistan: 4QCY20 Review – Cost pressures lead ...
FCEPL has posted a Net Loss after tax of PKR145mn for 4QCY20 (LPS: PKR0.19), mirroring LPS of PKR0.19 in 4QCY19. This takes CY20 NPAT to PKR177mn (EPS: PKR0.23) an improvement over Net Loss of PKR955mn (LPS: PKR1.60) in CY19. While we are impressed with consistently high sales delivery (PKR11.8bn in 4Q), the higher cost of milk procurement due to inflationary pressures and inability to pass on costs has restricted translation to the bottom-line with GMs dropping to 9.2% vs. 11.5% in 3Q. KEY H...
- Yusra Beg
Friesland Campina Engro Pakistan: 3QCY20 review — Remarkable sales rec...
FCEPL has posted 3QCY20 NPAT of PKR29mn (EPS: PKR0.04), vs. net loss of PKR570mn (LPS: PKR0.74) in SPLY. This takes 9MCY20 NPAT to PKR322mn (EPS: PKR0.42), an improvement over net loss of PKR809mn (LPS: PKR1.05) in 9MCY19. While we are impressed with the delivery of PKR12.2bn/quarter sales, higher cost of milk procurement during lean season has restricted translation to the bottom-line with GMs dropping to 11.5% vs. 19.1% in 2Q. Key highlights for 3QCY20: * FCEPL depicted a sharp 22%yoy gro...
- Abdul Ghani Mianoor
- Rahul Hans
Pakistan government approves support package for agriculture
The ECC has approved a PKR50bn package for the agriculture sector. This was included in the PKR100bn earmarked for SMEs and agriculture sector out of the PKR1.2tn relief package to counter the Covid-19 outbreak. Salient features of the package are given below. Impact on fertilizer: Positive for demand As mentioned in our recent report, we expected the government to announce a subsidy on fertilizers, which underpinned our Urea off-take assumption for CY 20 of 5.7mn tons (same as previous 5yr a...
- Yusra Beg
Pakistan (IMS): Engro Foods Q3 19 – marked improvement in sales, but...
FCEPL posted its second consecutive loss of PKR570mn (LPS: PKR0.74) in Q3 CY 19 vs. NPAT of PKR1mn (EPS: PKR0.00) in Q3 CY 18. The loss was higher than projected as margins nosedived to 8% from 15% seen in both Q3 CY 18 and Q2 CY 19 (lowest since its listing). This brings FCEPL’s 9M CY 19 loss to PKR809mn (LPS: PKR1.05) vs. a profit of 512mn (EPS: PKR0.67) in 9M CY 18. The company did not announce any interim dividend, as was expected.
- Yusra Beg
Pakistan (IMS): FrieslandCampina Engro Pakistan – 2QCY19 – Tax cha...
FCEPL posted 2QCY19 loss of PKR322mn (LPS: PKR0.42) vs. 2QCY18 NPAT of PKR210mn (EPS: PKR0.27). The loss was higher than our projected LPS of PKR0.18 due to a taxation charge; on a pre-tax basis, the result is inline with our projections. This brings FCEPL’s 1HCY19 loss to PKR239mn (LPS: PKR0.31) vs. a profit of 511mn (EPS: PKR0.67) in 1HCY18. The company did not announce any interim dividend, as was expected.
- Yusra Beg
Pakistan (IMS): FrieslandCampina Engro Pakistan – 2QCY19 preview –...
We expect FCEPL (formerly EFOODs) to post a 2QCY19 net loss of PKR137mn (LPS: PKR0.18), vs. 2QCY18 NPAT of PKR210mn (EPS: PKR0.27). This should take 1HCY19 net loss to PKR54mn (LPS: PKR0.07), vs. NPAT of PKR511mn (EPS: PKR0.67) in 1HCY18. While the revenue has largely stabilized in our view, we expect earnings pressure to continue this year due to weaker margins and higher distribution expenses (new product launches).
- YH Securities
- Yusra Beg
Pakistan (IMS): Engro Foods – Q1 CY 19 review: New product launches ...
EFOODS posted 1QCY19 NPAT of PKR83mn (EPS: PKR0.11), down 72%yoy, and lower than our expected EPS of PKR0.18. Although earnings quality remains weak, we are particularly encouraged by the sharp pickup in sales (up 22%yoy) likely led by newly launched products. The company continues to push advertising & marketing costs for its new products and we think this trend will likely continue well into CY19. Nonetheless, recovery within the business is becoming increasingly visible.
- Yusra Beg
Pakistan (IMS): Engro Foods – Q4 CY 18 loss is the highest in five y...
EFOODS posted a Net Loss of PKR448mn (LPS: PKR0.58) in 4QCY18 vs. a Net Loss of PKR3mn (EPS: PKR0.00) in 4QCY17. This takes full year CY18 NPAT to just PKR64mn (EPS: PKR0.08). This is a surprisingly weak result, where 4QCY18 LAT is the single worst quarter since 4QCY13, when the company faced severe distribution issues and power outages. The business clearly continues to face challenges on its costs side, where gross profits have halved to PKR743mn in 4QCY18 vs. PKR1,276mn in 3QCY18, and gross m...
- Yusra Beg
EFOODS: Deep cuts following weak performance
We reduce our earnings estimates for EFOODS by 13% on average, following disappointing 3QCY18 results (EPS: PKR0.00). We also rollover our valuation to Dec’19, where our new TP is PKR75/sh (PKR86/sh previously). EFOODS trades at a CY19F P/S and P/E of 1.3x/47.7x which we continue to find pricey. We will turn more positive on the stock in case of faster than expected conversion from loose-to-packaged, in the absence of which challenges on market share and margins will continue to hold sway.
Engro Foods (EFOODS): Earnings revised downward 'Maintain Sell'
We revise down our earnings estimates for Engro Foods (EFOODS) after tweaking our assumptions post 3Q2018 result, which fell short of our expectations. We maintain our ‘Sell’ call on EFOODS. We trim down our EFOODS’ sales forecasts for 2018E/2019F/2020F by 21/28/2% with revised EPS estimates of Rs0.7/1.1/1.6 (previously Rs0.9/1.5/1.6) on account of lower sales in 9Q2018. The company posted breakeven profits in 3Q2018 with lower than anticipated sales on the back of slowdown in its dairy segm...
- Ailia Naeem
- Raza Jafri
- Yusra Beg
- Yusra Beg
Pakistan (IMS): Engro Foods: Little improvement in Q2 CY 18 results; m...
We reiterate our cautious stance on EFOODS as competition within Pakistan’s dairy sector intensifies amid a tough regulatory backdrop. A weak 2QCY18 result (EPS: PKR 0.27) indicates meaningful bottomline growth may be some way off. We therefore maintain our estimates for EFOODS with a Dec'18 TP of PKR86/sh, Neutral.
- Yusra Beg
INTERMARKET INTEL: EFOODS Q2 CY 18 – hefty tax reversal saves the bo...
EFOODS posted 2QCY18 NPAT of PKR210mn (EPS: PKR0.27) vs. loss of PKR145mn (LPS: PKR0.19) in SPLY. On pre-tax basis, results are down by a massive 97%qoq vs. 1QCY18 NPAT of PKR399mn while hefty tax reversal of PKR196mn provided net recovery to the bottom-line.
Engro Foods (EFOODS): 2Q2018 EPS Rs0.3 vs. LPS Rs0.2 in 2Q2017 (Above ...
Contrary to our expectation of a loss during the outgoing quarter, EFOODS reported profits of Rs210mn (Rs0.27/share), mainly due to a tax credit of Rs196mn (Rs0.26/share) and higher than expected other income. However, in-line with expectations, the company reported decline in revenues in 2Q2018, down 12% YoY, as competition from new entrants continue to weigh in on the company’s sales. While we await management clarity on tax credit and other income, we attribute higher other income mainly t...
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