reports
- Masroor Hussain Zaidi
PIOC: Lower retention prices turns bottom-line red
Pioneer Cement Limited (PIOC) announced its results earlier today, posting loss after tax of PKR 412mn (LPS: PKR 1.81) during 3QFY20 against earnings of PKR 298mn (EPS: PKR 1.31) during same period last year. The result is above our expectations where main deviation emanated from lower than anticipated recognition of finance cost. On cumulative basis, net sales for the period declined by 20% YoY to PKR 5.98bn. We suspect i) lower retail prices, ii) higher dealer margins and iii) higher ener...
- Faizan Ahmed
BAFL: High provisioning keeps earnings lower than estimates
Bank Alfalah Limited (BAFL) announced its earnings for 1QCY20 in which the bank posted PAT of PKR 2,821 Mn (EPS: PKR 1.59). The earnings announcement disappointed our expectations due to higher administrative and provisioning expenses. Net-Interest Income of the bank improved by 6%/2% YoY/QoQ during the period to clock-in at PKR 11,781 Mn. The change in NII was largely in-line with estimates. High operating expenses during the quarter (cost to income ratio at 56% vis-à-vis 52% in 4QCY19) wer...
- Masroor Hussain Zaidi
FFC: Earnings remained stable as margin improves
Fauji Fertilizer Company Limited (FFC) announced its results earlier today, posting profit after tax of PKR 4.26bn (EPS: PKR 3.35) during 1QCY20 against earnings of PKR 3.7bn (EPS: PKR 2.91) during same period last year. Along with the result, the company also announced a dividend of PKR 2.5/Sh. This result was broadly in line with our expectations. Revenue of the company stood at PKR 20.6bn for the quarter, up by 2% YoY on the back of improved offtakes. Urea sales of FFC increased 4.8% on ...
- Asad Ali
INDU: Better cost controls bolster margins and bottomline
Indus Motor Company Limited (INDU) announced its results earlier today, registering profitability of PKR2,679mn (EPS: PKR 34.09) during 3QFY20 as compared to earnings of PKR 3,345mn (EPS: PKR 42.56) last year, outperforming market expectations. On a cumulative basis, INDU’s earnings eroded by 51% YoY to PKR 4,984mn (EPS: PKR63.41) for 9MFY20. Along with the result, the company also announced interim cash dividend of PKR10/sh, taking cumulative payout to PKR23/sh. Revenues stood at ...
- Masroor Hussain Zaidi
LUCK: Higher other income and lower ETR improves net margin
Lucky Cement Limited (LUCK) announced its result for 3QFY20 wherein the company reported a Profit after Tax of PKR 999mn (EPS: PKR 3.09) compared to PKR 981mn (EPS: PKR 3.03) in the previous quarter. This result was broadly in line with our expectations. On cumulative basis, the company reported profit after tax of PKR 2,936mn posting a 65% decline from same period last year. This sharp decline in profitability is mainly attributable to i) drop in local cement dispatches, ii) lower cement p...
- Faizan Ahmed
UBL: 1QCY20 release in-line with estimates
United Bank Limited (UBL) announced its 1QCY20 results today wherein the bank posted consolidated PAT of PKR 4,878Mn (EPS: PKR 3.98) for the quarter. The reported earnings in 1QCY20 improved 21% on a YoY basis but remained flat on a QoQ basis. The bank announced a payout of PKR 2.5 along with the result. Since the bank’s BoD date fell in the cut-off date for 1QCY20 dividends decided by SBP, the bank will now have to skip dividends for the next two quarters i.e. June and September ending qua...
- BMA Research
Pakistan Market Strategy: COVID-19 Outbreak – The Black Swan
COVID-19 outbreak has disrupted an already fragile economic recovery Fast paced viral spread is deepening worries: COVID-19 outbreak is the only hot topic as the death toll from the novel virus continues to rattle global economies. Continuing lockdowns and their ensuing effects on economic activity has led the International Monetary Fund (IMF) and other International Financial Institutions (IFIs) to slash global growth forecasts. In Pakistan, this outbreak has brought the economic recovery proc...
- Masroor Hussain Zaidi
EFERT: Lackluster volumetric sales dragged profitability
Engro Fertilizers Limited (EFERT) announced its result for 1QCY20 where the company reported a Profit After Tax of PKR 571mn (EPS: PKR 0.43) compared to PKR 6,361mn (EPS: PKR 4.76) in the previous quarter, translating into a decline of 91% on QoQ. The result was slightly below our expectations. The company recorded net sales worth PKR 10.79bn compared to PKR 43.61 in the previous quarter translating into a decline of 75%. Reduction in volumetric sales was the primary reason for the lower n...
- Asad Ali
Petrochemicals: Lower crude drives down petrochemical prices
The petrochemical chain pricing largely followed the direction of crude oil prices during the week tapering down over 10% across varied feedstock. Resultantly, PolyVinyl Chloride (PVC) and Polyester Staple Fibre (PSF) margins leapt higher during the week. During the week, PVC prices remained unchanged at USD865/ton for South East Asian region. On the other hand, ethylene prices came off by USD95/ton to stand at USD600/ton, a marked drop of 14% WoW. PVC core delta settled at USD565/ton, u...
- Asad Ali
Petrochemicals: Tumbling feedstock rates improve margins
The latest week saw petrochemical margins surge as feedstock rates tumbled in the South Asian region. Latest quotes indicate that the delta of PolyVinyl Chloride (PVC) increased 5% WoW to USD520/ton. During the week, PVC prices rose 1% WoW to reside at USD870/ton after depicting stability for the past eight weeks. Ethylene prices continued to drift lower for the third consecutive week as demand remained weak. Ethylene stood at USD700/ton for the week, down 4% WoW. The latest data on margin r...
- Yusuf Rahman
Pakistan Economy: Inflation eases as food prices come under control
CPI eases to 12.40% during Feb’20: Inflation during Feb’20 undershot industry estimates, registering at 12.40% during Feb’20 against 14.56% recorded during Jan’20. Moreover, on a monthly basis, CPI fell by 1.04% MoM during Feb’20 in contrast to rising by 1.97% MoM during the preceding month. Bulk of the decline emanated from index heavyweights, including the food segment (-1.99% MoM) and the housing segment (-2.47% MoM). The CPI’s food segment eased during the month supported primarily by the Go...
- Asad Ali
Petrochemicals: PTA-PX margins remain depressed
Primary margins for the petrochemical chain were noted on a downward trajectory (barring PVC) compared to the previous week. Latest quotes reveal core delta of PolyVinyl Chloride (PVC) inched up 1% WoW to USD495/ton. During the week, PVC prices remained unchanged at USD860/ton for South East Asian region. Ethylene rates came off by 1% WoW to settle at USD730/ton. The latest data on margin remains neutral for Engro Polymer and Chemicals Ltd (EPCL). Purified Terephthalic Acid (PTA) - Para...
- Yusuf Rahman
ENGRO: Analyst Briefing Highlights
Engro Corporation Limited (ENGRO) held its analyst briefing yesterday to shed light on its financial results for CY19. The company’s earnings jumped by 30% YoY to PKR 28.69/sh in addition to a total dividend payout of PKR 24.00/sh. ENGRO’s 4Q earnings were lower than industry estimates due to several one-offs including FCEPL’s impairment, Vopak’s tax adjustment, SAP implementation costs, HR training and development costs, IFRS 16’s implementation, and project feasibility costs. These one-off...
- Yusuf Rahman
Pakistan Strategy - Revisiting market thesis amid escalating uncertain...
The flames that initially re-ignited the KSE-100 index to a noteworthy recovery appear to have dimmed recently with the benchmark index losing 7% of its value from highs recorded during Jan’20. The market’s doldrums can largely be attributed to the absence of any notable triggers with investor sentiments likely being influenced by heightened inflationary pressures and geo-political uncertainty. As the situation continues to unfold, the air of uncertainty over the economy’s ability to strike ...
- Masroor Hussain Zaidi
ABL: One-offs yielded above expected results
Allied Bank Limited (ABL) announced its financial results for CY19, posting a profit after tax (PAT) of PKR 14.49bn, 11% up on YoY basis, above our expectation. Major deviation emanated from WWF reversal worth PKR 1.12bn recorded during 4QCY19 compared to total charge of PKR 345mn in 9MCY19. The result was accompanied with a dividend of PKR 2/sh for 4QCY19, taking cumulative dividend to PKR 8/sh for CY19 compared to PKR 8/sh in CY18. Net Interest Income (NII) increased by 27% on QoQ basi...
- Asad Ali
EPCL - Analyst Briefing Takeaways
Engro Polymer and Chemicals Ltd (EPCL) held its analyst briefing to discuss the CY19 results and outlook of the company. To recall, earnings for the year stood at PKR3.7bn (EPS: PKR4.07) as compared to PKR4.9bn (EPS: PKR5.42). Key takeaways are as follows: The company saw volumes tread lower for the PVC and Caustic Soda segment in line with macro slowdown, weak demand from lower development spend and regulatory impediments. PVC sales stood at 191k tons (down 6% YoY) and caustic soda sales st...
- Masroor Hussain Zaidi
MCB: Earnings overshoot as portfolio gains make their play
MCB Bank Limited (MCB) announced its financial results for CY19, posting a profit after tax (PAT) of PKR 23.95bn, 17% up on YoY basis. This result was above our expectation with deviations emanating from elevated portfolio gains. This result was accompanied with a dividend of PKR 5/sh for 4QCY19, taking cumulative dividend to PKR 17/sh for CY19 compared to PKR 16/sh in CY18. Net Interest Income (NII) increased by 8% on QoQ basis taking cumulative increase to 33% for CY19. This increase w...
- Yusuf Rahman
Pakistan Economy: Inflation surprises; monetary easing likely delayed
CPI overshoots estimates: Jan20’s CPI inflation overshot industry estimates by a wide margin with a reading of 14.6% while on a monthly basis, inflation surged by 2.0% MoM. Elevated CPI during Jan’20 was largely a consequent of a significant spike in food prices with food inflation recording an uptick of 3.4% MoM. Moreover, the food inflation metric depicts an even more alarming trend on an annual basis, witnessing an upsurge of 23.7%. Proliferating inflationary pressures during recent times can...
- Asad Ali
Petrochemicals: PVC delta subsides; PTA-PX margin rebounds
The petrochemical chain saw feedstock rates shuffle during the week, leading to rise in PTA-PX margin and a decline in PVC-Ethylene core delta. Latest quotes suggest core delta of PolyVinyl Chloride (PVC) settled 1% WoW lower at USD498/ton PVC stood unchanged at USD860/ton while ethylene notably rose by USD10/ton to USD725/ton, up by 1% WoW. The rise in ethylene rates came on the back of restricted supplies in the region. The latest data on margin remains neutral for Engro Polymer and Ch...
- Yusuf Rahman
Issuance of Energy Sukuk II approved by the ECC
As anticipated, the Economic Coordination Committee (ECC) has allowed the raising of PKR200bn from Islamic Banks through the issuance of Sukuks. The consortium will be led by Meezan Bank Limited and will include most of Pakistan’s Islamic and Conventional Banks (via their Islamic Window). The Sukuk issue, coined Pakistan Energy Sukuk II, was initially supposed to be launched back in Jun’19. The issue, however, was delayed due to a sovereign guarantee limit imposed by the IMF in light of Paki...
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