The Karachi Stock Market has closed at another all time high with the KSE-100 index ending the week at 24,870.55, with an intra-day high of 25,007.73 today.
The KSE-100 index rose further today and closed at a new high of 24.302.18 . The intra-day high was 24,338.89.
The KSE – 100 index has finally broken the 24k barrier setting a new all time high close at 24,180.49. The index touched 24,204.48 during the day but then closed lower.
The first phase of the initial public offering (IPO) of Engro Fertilizers concluded on Thursday, with as many as 410 bidders taking part in the book-building portion of what may arguably be the most anticipated public listing in the country’s recent history. Engro Fertilizers is issuing 75 million ordinary shares at a floor price of Rs20 per share, which includes a premium of Rs10. The money raised through the IPO will be utilised to fund development capital expenditures for securing additional gas supplies along of the balance sheet restructuring to optimise the company’s capital structure. Only institutional investors and high net worth individuals (HNWI) were allowed to take part in the three-day book-building portion of the IPO, which involves 75% of the total issue size, or 56.25 million ordinary shares.Speaking to The Express Tribune, AKD Securities Vice President for Investment Banking, Syed Khurram Shahid, said the offer’s book runners have determined the cut-off/strike price of Rs28.25 per share through the Dutch Auction Method, an auction structure in which the price of the offering is set after taking all bids and determining the highest price at which the total offering can be sold.
AKD Securities, along with Next Capital, is the joint book-runner for the issue. Habib Bank and Allied Bank are serving as financial advisers, lead managers and arrangers for the IPO.“We expect the public subscription to be held by the middle of next month,” Shahid said, referring to the general public portion, which will consist of the remaining 25% of the total offer size. This means roughly 28.25 million ordinary shares will be issued to the general public at the rate of Rs28.25 per share, a price that has been determined through the book-building exercise.The issue of 75 million ordinary shares constitutes 5.8% of the total post-IPO paid-up capital of the company. The book-building portion of the IPO has been oversubscribed by 3.9 times, according to Shahid. “The response from institutional investors and HNWIs has been overwhelming, even though the issue size was huge,” he said, adding that he expects the general public portion to be oversubscribed by many times as well.
With the establishment of a 1.3 million tons, state-of-the-art fertiliser complex in 2011, the company’s annual urea production capacity stands at 2.3 million tons, which is equal to one-third of the country’s total urea production capacity.Engro Fertilizers has consistently faced gas supply shortages in recent years, which resulted in a net loss of Rs2.9 billion at the end of 2012. However, the company regained stability in the first half of 2013, as it posted a profit after tax of Rs1.4 billion at the end of the six-month period.Apart from issuing 75 million new shares its parent company, Engro Corporation, will also divest up to 30 million shares− or 2.3% of post-IPO paid-up capital− out of its current holding at the strike price of Rs28.25.Therefore, subsequent to the IPO and the divestment, Engro Fertilizers’ shareholding structure is expected to be Engro Corporation (91.9%), book-building participants (4.3%), general public (1.4%) and divestment to local and international investors and HNWI (2.3%)…. EXPRESS TRIBUNE
The Karachi Stock market’s KSE-100 index made an intra-day high of 24,007.11 points but failed to close above yesterdays all time high of 23,819.43.
The State Bank of Pakistan announced a hike of 50bps in its Monetary Policy statement today, taking the discount rate to 10%.
Fauji Fertilizer Company (FFC) announced its financial results for the nine month period ending September 30 2013, posting an after-tax profit of Rs.14.8 billion, up 8% from Rs13.7 billion last year, resulting in total earnings per share of Rs11.71 for the nine month period compared with Rs10.84 last year. The company announced a cash dividend of Rs. 4.1 per share for the last quarter, bringing the total payout for the nine month period to Rs11.35.
Net sales for the nine month period were at Rs.52.5 billion, up 5% from Rs.50 billion last year. Sales were pushed along by an 11% increase in urea offtakes to 1.79 million tonnes year on year for the nine month period, and a 8% year on year increase in urea prices, despite a 2% drop in offtakes on a quarter on quarter basis, ….Urea demand for the nine month period remained upbeat on expectations of higher prices post gas-price rationalisation which also kept prices up. The company also witnessed a 28% fall in finance cost down to Rs584 million for the nine month period, from Rs816 million in the previous year.
Other income for the company increased by 21% from Rs2.8 billion last year to Rs3.4 billion this year, mainly due to dividend payout from its subsidiaries. FFC received dividend payments from Fauji Fertilizer Bin Qasim Limited (FFBL) and Fauji Cement Company Limited (FCCL), two subsidiaries of the Fauji group, in the last quarter. FFBL has also announced a dividend payout this quarter. However, FCCL has not announced any dividend, which will show in FFC’s financial results for the fourth quarter.
Coupled with gas shortages, investors have been expecting price hikes for quite a while, which has resulted in growth offtakes as buyers stock up on fertilizer at the current price. To be able to maintain profit rates, the fertilizer industry has been urged to improve efficiencies, which may be linked to gas allocation in the future…. EXPRESS TRIBUNE
Pakistan Petroleum Limited announced their results for the first quarter of the current fiscal year (1QFY14), posting after-tax profits at Rs12.47 billion, up 11% from Rs11.28 billion for the corresponding period in the previous year, and 48% from Rs8.42 billion in the previous quarter. Earnings per share were at Rs6.33 compared with Rs5.72 last year. Net sales were reported at Rs27.78 billion, up 14% from Rs24.472 billion in the previous year. According to analysts, the increase in profits is mainly a result of higher oil production (30% higher year on year according to JS Global Securities); and a depreciation in the Pakistani rupee. The company was also able to benefit from stable and relatively higher oil and gas prices.Other income fell to Rs2.16 billion from Rs2.27 billion last year. However, on a quarterly basis other income rose 68% from Rs1.29 billion in the previous quarter. Analysts attribute this to earnings from Pakistan Investment Bonds issued by the government in an attempt to clear up circular debt. According to Global Securities Pakistan, the fall in other income on a year-on-year basis is due to falling interest rates… EXPRESS TRIBUNE
Engro Fertilizers, a subsidiary of Engro Corporation, posted its financial results on its website, announcing a profit of Rs3.2 billion for the first nine months of calendar year 2013. This compares to a loss of Rs2.97 billion in the corresponding period last year, resulting in earnings per share of Rs2.77 for the current period, compared with a loss per share of Rs2.62 in the previous year. The company was able to increase net sales by 78% to Rs34.4 billion, resulting in a 151% increase in net gross profits from Rs5.9 billion in the previous year to Rs14.8 billion in the first nine months of the current calendar year.
The increase in sales was mainly due to availability of gas for Engro’s EnVen plant. As a result of which, both plants owned by the company were operational in third quarter of the current calendar year. However, the supply of gas to the new plant is temporary, and analysts expect a reversion to its previous inactive state once the allotted time is over. Engro Fertilizer also saw an increase of 188% in other income, which rose from Rs212 million to Rs611 million for the current nine month period. Conversely finance costs fell 15% from Rs8.1 billion to Rs6.9 billion.
On quarterly basis, the company’s profits stood at Rs1.8billion in the third quarter of calendar year 2013, as compared with a loss of Rs1.2 billion in the corresponding period last year. Profits almost doubled on a quarter on quarter basis, driven primarily by 31% higher urea sales due to gas availability for both plants.Engro Fertilizer is one of the largest fertiliser producers in Pakistan. Its EnVen plant was the company’s biggest investment in the country, and the largest single train fertiliser plant in South Asia….. EXPRESS TRIBUNE
Oil and Gas Development Company (OGDC) on Friday announced a 30.9% rise in profit for the first quarter of current fiscal year 2013-14 on the back of higher production and better petroleum prices. Profit for the July-September quarter soared to Rs.33.59 billion from Rs.25.655 billion in the same period of previous year, a better result than what most analysts had predicted. The company announced a cash dividend of Rs.2 for the quarter. State-run OGDC, which is Pakistan’s largest petroleum producer, also benefited from depreciation of rupee as most of the wellhead gas prices were benchmarked with the US dollar, analysts said.
Another major boost to profit came from other income, which rose 184% to Rs7.425 billion. Most of this increased income came from interest earnings on Pakistan Investment Bonds, which the government had issued to settle inter-corporate circular debt. OGDC’s exploration expense jumped 34% to Rs1.95 billion,…With a market capitalisation of more than $10 billion, OGDC is also the largest listed company. The company accounts for 54% and 26% of oil and gas production respectively. It is developing fields, which hold substantial potential, including Kunnar Pasakhi Deep, Sinjhoro and Uch fields. OGDC is also on the list of companies, which the government intends to privatize…. EXPRESS TRIBUNE
HUBCO : EPS : 1.57
MCB : 35% CASH – EPS : 16.98
FFBL : 10% CASH – EPS : 3.53
OGDC : 20% CASH – EPS : 7.81
NBP : EPS : 3.41
BAFL : EPS ; 2.46
KOHC : EPS : 4.78
PSO : EPS : 31.57
NPL : 10% CASH – EPS : 1.53
MLCF : EPS : 1.05
ENGRO : EPS : 11.58
PPL : EPS : 6.35
LUCKY : EPS : 8.17
NML : EPS : 5.48
FFC : 41% CASH – EPS : 11.71
NCPL : 15% CASH – EPS : 1.37
NCL : EPS : 1.23
Pakistan Tobacco Company (PTC), despite a slow third quarter growth, more than doubled its profit and increased revenues by nearly a fifth for the nine-month period that ended on September 30, 2013, ….A subsidiary of British American Tobacco and the largest tobacco manufacturer in the country, PTC earned more than Rs10 million a day in profit during the first nine months of 2013.The company’s profit for the period increased 134% to Rs2.7 billion or Rs10.57 per share compared to Rs1.1 billion or Rs4.51 per share in the corresponding period of 2012. The manufacturer of Benson & Hedges and John Player Gold Leaf – the company’s high-end market brands – reported Rs22.7 billion in revenues for the nine-month period, an increase of 19% compared with Rs19 billion earned in the same period last year.
The tobacco giant has paid Rs1.4 billion income tax for the nine months, a 115% increase from Rs.653 million it paid to the national exchequer in the corresponding period of 2012. This is in addition to the Rs34 billion it paid as excise duty during the period. PTC earned Rs610 million or Rs2.39 per share during the quarter ended September 30, 2013, a decline of 12% compared with Rs691 million or Rs2.71 per share in the corresponding period of 2012. Revenues for the quarter increased 11% to Rs6.5 billion compared with Rs5.8 billion in the same quarter last year. The tax levied on retail price of each packet of cigarettes ranges from 68.5% to 81%, indicating that the tobacco industry is taxed at the highest rate.
Earlier, PTC had an impressive first half, posting a 353% increase in profit and 23% increase in revenues. The abnormal gains were a result of the rise in core profitability and other income, …By contrast, PTC’s core profitability for the quarter ended September 2013 was 9.3%, down from 11.6% in the same quarter last year. Other income for the quarter also dropped to Rs13 million compared with Rs24 million of the same quarter last year. On the other hand, core profitability increased from 6% during the first nine months of 2012 to 12% for the same period this year. Similarly, other income for the nine-month period of 2013 increased to Rs118 million, up from Rs51 million in the corresponding period of 2012…. EXPRESS TRIBUNE
Fauji Cement – an associated company of one of the largest business conglomerates in Pakistan, the Fauji Group – has reported an impressive profit after tax of Rs582 million, up 61% in first quarter of fiscal year 2013 against a profit of Rs361 million in the same quarter of the preceding year. The extraordinary performance of the company in the first quarter has also raised its earnings per share (EPS) to Rs0.44 from Rs0.27 in the corresponding period….the company performed well due to sharp increase in its top line which was up by 12% year on year (YoY) and improved gross margins due to higher cement prices and lower key input cost that is coal prices in international market. The company also benefitted from a sharp decline in its financial charges and higher other income. Moreover, the company has paid corporate tax at an effective rate of 30% as against the tax payment at an effective tax rate of 31% in the first quarter of the preceding year (1QFY13). The sharp increase in sales due to higher prices and improved volumetric sales were the core factors that drove the profitability.
Fauji cement reported about 4 basis points (bps) jump in its gross margin due to higher cement prices in domestic market and lower coal prices in international market that reduced the production cost of the company. Moreover, the decline in financial charges was primary because of the loan repayment as the company has repaid major loans of about Rs2.25 billion in fiscal year 2013, which seems to be the major reason behind the decline in financial charges. On the other hand, the company has reported a handsome upsurge of over three times in other income to Rs52 million as against the other income of Rs14 million during the same period last year. Resultantly, the company’s profit before tax reached Rs835 million in 1QFY13 as against Rs526 million in corresponding period of last year…. EXPRESS TRIBUNE
NCL : 20% CASH + 10% BONUS – EPS : 12.51
NCPL : 20% CASH – EPS : 7.45
PRL : EPS : – 7.85
POL : EPS : 15.25
APL : EPS : 16.17
ACPL : EPS : 3.69
NRL : EPS : 2.52
FCCL : EPS : 0.44
EFOODS : EPS : 1.62
DGKC : EPS : 2.44
ATRL : EPS : 7.06
KAPCO : EPS : 1.96
PAKT : EPS : 10.57
NCL : 4TH
PRL : 14TH
POL : 21ST
EFOODS : 22ND
KAPCO : 23RD
HUBCO : 24TH
FFBL : 25TH
KOHC : 26TH
BAFL : 27TH
NPL : 28TH
ENGRO : 29TH
FFC : 30TH
Pakistan Petroleum Limited (PPL) plans to spend Rs10 billion in fiscal 2013-14 to drill seven to eight new wells in a bid to shore up gas production, which is continuously declining from the aging fields, ….Exploration activities have been expedited on the 13 blocks it acquired in 2010 as part of the company’s strategy to find replacement for the older fields like Sui and Kandhkot….” Right now, our entire focus is on the Gambat South block because that is where we expect the biggest addition in gas supply to come from.”Earlier this year, PPL announced gas discoveries from two wells in the block, which is located in Sindh’s Sanghar district. This will add 50 to 70 million cubic feet of gas (mmcfd) to the system.
PPL accounts for 22% of the country’s gas production. It posted a profit of Rs41.95 billion in fiscal 2012-13, a marginal increase of 2% over the previous year. But output from all of its major fields declined during the year.Overall, PPL’s gas production came down to an average of 908mmcfd from 1,000mmcfd recorded last year. Its crude oil output went up to 2.9 million barrels a year from 2.2 million barrels, increasing its profitability….PPL’s six producing fields include Sui, Kandhkot, Adhi, Mazrani, Chachar and Hala, while it has working interest in eight partner-operated fields. By the end of June 2012, it was sitting over cash and cash equivalent reserves of Rs34.5 billion while currently Rs26.9 billion are still stuck in circular debt. PPL also has working interest in offshore fields in Iraq and Yemen. In Iraq, where there is a high chance of success, the company will spend $100 million over five years at part of the contract.
PPL hopes to start production of iron ore from Balochistan next year. BME, a 50-50 joint-venture between Balochistan government and PPL, owns three mining leases in Dilband and Nokkundi. Khan say’s the estimated reserves of iron ore stand at around 40 million tons. Production of iron ore from Nokkundi is expected to start in 2014 as most of the planning and design work has already been commissioned….The joint-venture remains the leader in mining and supplying barite in Pakistan, meeting 80% of the requirement of petroleum exploration companies. In the past year, they also managed to export barite….. EXPRESS TRIBUNE
Maple Leaf Cement, the cement producer with the most debt in the sector, has recorded an abnormal growth in profits, which was driven by higher cement prices, lower coal prices, dipping interest rates and tax reversal… the building-material maker’s profits multiplied six and a half times or 550% in terms of growth in percentages to Rs3.23 billion for the fiscal year 2012-13 against Rs496 million in fiscal 2012.
Rising cement prices in the country are helping substantial growth across the whole sector and absorbing the effect of sluggish demand. Average cement prices of a 50-kilogramme bag recorded for the year clocked in at Rs450, according to Investcap analyst Abdul Azeem.Sales grew 12.3% to Rs17.36 billion for the year owing to lucrative cement prices on the local front and better export volumes. But more importantly, the company managed to boost its gross profits by Rs2 billion to Rs6.05 billion for the year as lower international coal prices resulted in cost-savings for the company. Resultantly, gross margins clocked in 880 basis points higher – one percentage point is equal to 100 basis points – at 34.8% for the year, signalling to an exceptional year for the highly-leverage building-material maker.
State Bank of Pakistan’s policy of slashing interest rates has also helped the cement sector immensely as whole, but mostly Maple Leaf Cement, as financial costs have declined making room for better growth in earnings. Financial charges for the company decreased 27.5% to Rs1.7 billion for the year supporting the company’s bottom-line to post the highest profit in five years.Tax-reversal of Rs125 million in the fourth quarter of the year provided further augmentation against a tax charge of Rs63 million in the first nine months of fiscal 2013….. EXPRESS TRIBUNE
Lucky Cement – the country’s largest cement manufacturer– recorded its highest-ever profit, by registering earnings of Rs9.714 billion for the fiscal year 2012-13. This entailed a jump of 43% compared to previous year’s profit of Rs. 6.782 billion….. Lucky announced a cash dividend of Rs8 per share for the financial year as earnings per share soared to Rs.30.04 versus Rs20.97 in fiscal 2012. Despite volumetric variance of 1%, top-line of the company grew 13% to Rs37.8 billion against Rs33.3 billion in 2012 due to a sharp increase in cement prices. The company successfully increased its export market share to 27.3% during the year compared to 26.3% in the previous year. On the local front, Lucky Cement’s market share fell half a percentage point to 15%.
Sales volume in the local market registered a growth of 1.3%, rising to 3.77 million tons compared to 3.72 million tons last year. Exports also registered a growth of 1.7% from 2.25 million tons in 2012 to 2.29 million tons during the financial year ending June 30, 2013.Lucky’s revenue per ton also rose 12% to Rs6,240 against Rs5,578 in the last fiscal year. The cost per bag, on the other hand, inched up 1%, …..Gross profit swelled 31.44% during the year to Rs16.721 billion as compared to Rs12.721 billion reported last year, reflecting a gross profit margin of 44% in the year, up by six percentage points.
Lucky Cement reported progress on its joint-venture investment in a cement plant in the Democratic Republic of the Congo, where financial closure is expected by December. The joint-venture project of a cement grinding facility in Iraq was also expected to be completed by the end of October.The company managed to realize other income at Rs248 million during the current year against Rs5 million during the same period of the previous year. Lucky Cement has placed orders for two vertical grinding mills to be installed at its Karachi plant. In addition to this, the company is planning to introduce tyre derived fuel (TDF) at the Pezu plant in Khyber-Pakhtunkhwa to replace coal. Furthermore, the company is in negotiations with Peshawar Electric Supply Company to supply surplus power to the company…. EXPRESS TRIBUNE
The State Bank of Pakistan has raised its discount rate by 0.5% from 9 to 9.5% in its Monetary Policy announcement today.
DG Khan Cement, which is part of the Nishat Group and one of the largest cement manufacturers in the country, posted an increase of 34% in its profits for fiscal year 2013 over the previous fiscal year….., DG Khan reported a net income of Rs5.5 billion for the fiscal year 2013, compared to Rs4.11 billion in fiscal 2012…..The reported earnings were lower than estimates due to a higher than anticipated tax rate of 37.4% in the fourth quarter of fiscal 2013, Global Securities said in a note to its clients. The company declared a final cash dividend of Rs3 per share.
AKD Securities commented, also in a research note to its clients, that the profits of the cement producer were lower than the brokerage house’s estimates of Rs5.82 billion. Topline Securities analyst Asad Siddiqui, commenting on the outlook, went on to say that analysts were upbeat for DG Khan Cement along with the whole (cement) sector, which is expected to grow in the ongoing fiscal year owing to strong demand and higher cement prices. “I think the cement sector will successfully recover from all present uncertainties, and most cement companies will show growth in the ongoing fiscal year,” said Siddiqui.
Revenues of DGKC clocked in at Rs24.91 billion during fiscal 2013, up 9% year-on-year (YoY). In spite of stable dispatches, this growth in revenues was likely supported by a 7% increase in cement prices during the year. On a quarterly basis, the company posted a profit of Rs1.26 billion in the fourth quarter of the fiscal, down 5% quarter-on-quarter (QoQ).Additionally, the federal excise duty was also cut by Rs100 per ton increasing the company’s retention prices further. On a quarterly basis, revenues grew 5% QoQ on account of 2% increase in local cement prices and a likely 6% increase in off-take in the quarter. The increase in dispatches was, however, slightly offset by lower retention prices of cement exports to Afghanistan due to severe competition.
DGKC’s gross margins expanded four percentage points to 37% during the year, owing to 20% decline in coal prices to $85 per ton and commencement of power from the waste heat recovery system at the company’s production plant. On a QoQ basis, margins also recovered by 3pps to 38% in the last quarter due to lower electricity and gas costs over improved gas supply during the period to the company’s captive power plant. Moreover, the company’s plant maintenance shutdown scheduled during third quarter of fiscal also reduced margins for that period.
Finance costs showed a substantial decline of 40% YoY to Rs995 million during the fiscal 2013 due to significant deleveraging as the company reduced its debt by Rs1 billion during the period and a 350 basis point (bps) cut in the discount rate. On a quarterly basis, finance costs witnessed a 41% QoQ decline to Rs132 million in the fourth quarter due to lower short-term borrowing for the period. Other income rose 23% YoY to Rs1.46 billion during the fiscal and 21% QoQ to Rs388 million during 4QFY13. This increase was likely due to higher dividend income generated from the company’s investment in Muslim Commercial Bank (MCB), which is also part of the Nishat Group… EXPRESS TRIBUNE
On Wednesday, Pakistan Refinery (PRL) announced a spectacular turnaround in fortunes as it converted losses of the previous year to profits in the fiscal year 2012-13. The country’s third largest refinery has been accumulating losses over the years, which had grown to Rs.2.49 billion as of June 30, 2013 casting a shadow on the company’s ability to continue operations, giving rise to its status as a going concern – a term for a company that has the resources needed in order to continue to operate indefinitely, and if a company is not a going concern it means the company has gone bankrupt.PRL reported a profit of Rs496 million for fiscal 2013, compared to a loss of Rs1.62 billion last year, reflecting a stellar turnaround in fortunes on behalf of the company. The refinery also announced a final cash payout for the year of Rs.2.85 per share. Although PRL’s share in the country’s installed capacity is 17%, it has reported a profit only twice in the last five fiscal years. The stake of foreign entities in the company is as high as 42%, and 60% of the major players in the country’s energy sector are on the company’s board, as revealed by PRL CEO Aftab Husain in an exclusive interview to The Express Tribune. Shell Petroleum, Chevron Global Energy and Pakistan State Oil have 30%, 12% and 18% stakes in PRL, according to its shareholding structure as on March 31, 2013.
Revenues of PRL clocked 4% higher at Rs132 billion over the year, while the refinery managed to boost its refining margins by 148 basis points (a 100 basis points is equal to 1 percentage point) helping to multiply its gross profit by 67 times, owing to favourable pricing mechanism for oil as the government linked the prices with international oil prices besides allowance of 7.5% deemed duty to shield the refining business from volatility in international oil prices. Deemed duty is a tax the government lets refineries charge in order to sell locally-produced fuel at the same price as imported fuel. PRL’s expenses grew in line with the operations, however, other income took a 50% drop to Rs186 million in the year. Finance costs took a breather owing to State Bank’s policy of slashing interest rates throughout the year.
The notice went on to say that keeping in view the changes in government policy of price determination of oil, things are expected to look bright for the company. However, PRL’s auditors, without qualifying any opinion, say that the present conditions due to a massive accumulation of losses by the company indicate the existence of “material uncertainty” which may cast significant doubt about the company’s ability to continue as a going concern. Apart from issuing term finance certificates worth Rs.4 billion in August to meet the working capital and capital expenditures needs, PRL announced its plans to set up an isomerisation unit to convert naphtha into motor gasoline, which may help the company’s bottom-line growth in the in future as motor gasoline is a better margin product than naphtha….. EXPRESS TRIBUNE
DGKC : 4TH . 30% CASH – EPS : 12.56
PRL : 4TH . 28.5% CASH – EPS : 14.17
LUCKY : 17TH. 80% CASH - EPS : 30.04
NPL : 20TH . 20% CASH – EPS : 7.73
PNSC : 24TH. 10% CASH – EPS : 15.08
MLCF : 25TH. EPS : 6.11
NML : 40% CASH – EPS : 16.63
KTML : EPS : 11.09
Investors spurned Pakistan State Oil (PSO) on Thursday despite an increase in profits and a global spur in commodity markets amidst uncertainty over Syria, as the company announced a lower than expected dividend payout. This was the first result posted by the major Oil Marketing Company (OMC) since the government announced the partial resolution of the circular debt issue, something that had staggered oil and power firms and threatened to destroy the sector. PSO is the largest OMC in the country, controlling nearly three quarters of the market. As a result, it was also the worst affected by circular debt, forcing the company to borrow heavily to finance operations, resulting in large finance costs. PSO on Thursday reported a 38.64% rise in profit to Rs12.557 billion in fiscal 2012-13, compared with Rs9.056 billion in the previous year, on the back of a one-off decline in operating expense and finance cost. A major boost to net profit came from an 18% reduction in operating expense to Rs14.8 billion.
PSO’s finance cost saw a slide of Rs4 billion to Rs7.59 billion, as trouble associated with inter-corporate circular debt eased on the company. A relative plateauing of the rupee’s exchange rate also resulted in a lower than expected exchange loss – the extra cost paid for imported fuel due to fluctuations in the exchange rate, analysts said. Revenues increased by 7% to Rs1.294 trillion from Rs1.199 trillion in the previous year as PSO continued to hold a major chunk of market share in sale of petroleum products, including diesel and furnace oil which saw significant increases in off-takes. PSO’s gross profit rose by 6% to Rs36.5 billion. Other income came down by 38.6% to Rs5.9 billion mainly due to decline in interest earnings as a result of a government effort to clear circular debt, analysts said. Earnings per share (EPS) for PSO jumped to Rs50.84 from Rs36.67 in the previous year, a 39% increase. For comparison, EPS for 4Q2013 was Rs13.1 per share, compared to Rs0.8 per share in 4Q2012. Investors however weren’t as forgiving. PSO announced a final cash dividend of Rs2.5 per share, taking the figure for the whole year to Rs4.58 per share, and a 25% bonus share….The improved performance was in line with market expectations, as the result of a first step by the government to resolve the country’s energy crisis. However, investors worry that circular debt might rise again, and rapidly, as the government has not completely resolved the issue and there is an absence of any visible long term measures against the problem…. EXPRESS TRIBUNE
Kot Addu Power Company (Kapco) – the country’s largest independent power producer – announced 35% higher profits of Rs7.35 billion in fiscal 2013, compared to Rs5.68 billion it earned in fiscal 2012…..the earnings announcement was accompanied by cash payout of Rs4.5 per share, taking full-year dividend payout to Rs7.5 per share. Even though the power producer’s revenue fell 3% during the year, Kapco managed to earn a higher gross profit and recorded a higher net profit for the period – an achievement in the present shape of the country’s energy sector. Revenues clocked in at Rs97.71 billion in fiscal 2013, compared to Rs100.5 billion in fiscal 2012 on the back of 9% lower utilisation in the period under review, … However despite a shrinking top-line, Kapco’s gross profit climbed an impressive 15% to Rs13.56 billion. The IPPs revenues are dollar-denominated, so whenever the rupee depreciates it results in gains for the company. Furthermore, utilisation above 60% also allows the IPPs to gain benefits from the government.
Kapco’s results also have the effect of Rs82 billion term finance certificates in September 2012 as other operating in income and finance costs shrunk 23% and 18%, respectively. In the last quarter alone, finance costs surge 124% to Rs3.07 billion due to short-term borrowings and payables to Pakistan State Oil (PSO), according to Shaikh of Global Securities. In July, the company retired Rs17.2 billon payables to PSO after injection of Rs503 billion by government to contain the circular debt. Kapco realised a benefit to the tune of Rs41.4 billion from the injection. Furthermore, the effective tax rate in the last quarter clocked in at 29%, thus effective tax rate stood at 33% for the full-year period…. EXPRESS TRIBUNE
Lafarge Pakistan Cement posted an impressive growth of 73% in earnings during the first six months of 2013…. the cement producer’s profits jumped to Rs.865 million – with earnings per share (EPS) of Rs0.66 – from Rs499 million (EPS of Rs0.38), exhibiting growth of 73.6%. The earnings announcement was not accompanied by a payout to shareholders. Higher gross profit – due to very high margins – and lower financial costs helped the company post stellar growth in earnings, … surging cement prices where retention prices are estimated to be higher than 12% and lower coal prices, which have fallen 17% on average in dollar terms, supported the cement producer to expand gross margins by 390 basis points to 35% in the period.The year 2013, so far, has seen a continuation of high retention prices that has helped the cement sector improve their margins considerably. In the period that has seen financial health of many cement companies improve on account of better retention prices at home, smaller companies like Lafarge Cement have also benefitted.
In the semi-annual period, the average increase of 12% in Lafarge’s net retention prices is primarily due to rising local industry capacity utilisation amid firm domestic demand.Finance costs, on the other hand, have been the Achilles heel of Lafarge Cement dampening growth, but in a low-interest rate environment and through restructuring (deleveraging its balance sheet) the cement producer has managed to cut down finance charges significantly.Financial costs clocked in 57% lower at Rs258 million compared to the corresponding half-year period of 2012 owing to a decline in borrowings and improvement in cash flows, which has supported the company’s bottom-line.Only in the second quarter of 2013, Lafarge managed to grow its earnings by 64%, which is attributable to higher gross profit led by 11% higher volumetric sales and better margins which were up 6 percentage points to 38% – an impressive expansion in margins by any standard.
Lafarge Pakistan Cement is part of Lafarge – a French company specialising in the manufacture of construction materials. It is the only multinational cement manufacturer in Pakistan, which commenced commercial operations in December 2006 with an annual cement production capacity of 2.5 million tons, says the company’s website. Lafarge Pakistan’s unique product offering is its product Pakcem, which is the first cement in Pakistan to comply with European Standards (EN 197) and Indian Standards (IS 12269), and also exceeds requirements of Pakistani Standard (PS 232)…. EXPRESS TRIBUNE
Engro Corporation announced a spectacular turnaround in fortunes as the company reported a profit of Rs3.83 billion in the first half of 2013, compared to a loss of Rs.340 million in the corresponding half of 2012, attributable to a rebound in its fertiliser and polymer divisions…. consolidated revenues of the company clocked in at Rs66.9 billion, up 25% over the corresponding half of 2012. The result announcement was not accompanied by any payouts.
Engro’s fertiliser business reported highest-ever six-month revenue of Rs20.5 billion during the period. It also recorded a highest-ever six-month urea sales volume of 622,000 tons during the half, attributable to increased production on the back of continued operation of its billion-dollar Enven plant on the Mari gas network as well as lower imports and higher off-takes in anticipation of the general sales tax (GST) and gas price hikes. The growth in sales is 57% higher than corresponding first half’s volume of 397,000 tons.The company received rota gas from the Sui Northern Gas Pipelines (SNGPL) for 28 days during the second quarter. Subsequently, Engro’s market share in the urea market increased to 23% in first half of 2013 from 14% in the same period last year.
During the first half of 2013, revenue of Engro Foods fell 4.3%, driven by a slowdown in consumer demand and due to distribution issues in certain cities, electoral process in the country, deteriorating law and order situation and severe power crisis, said a press statement of the company with the results. Despite lower revenues, profit was 9% higher than the same period of last year. Engro Foods is in the process of revamping its distribution structure to support the growth trajectory going forward. The ice cream business recorded revenue of Rs1.4 billion, a decrease of Rs114 million as compared to the same period last year.
Engro Polymer and Chemicals recorded a growth of 27% in revenues during the period, mainly attributable to higher prices and higher vinyl chloride monomer (VCM) exports. Higher sales along with good margins led to a profit of Rs425 million compared to Rs59 million in first half of 2012. Production operations remained smooth throughout the period with VCM production showing a 25% growth over the same period of last year. Most of the VCM was consumed in-house, while surplus production of about 10,000 tons was exported.
In first half of 2013, the Qadirpur power plant dispatched a total net electrical output of 796 gigawatt hours (GwH) with a lower load factor. Sindh Engro Coal Mining Company (SECMC) set up a wholly-owned subsidiary, Thar Power Company. It signed agreements with KESC for supplying 600MW….. EXPRESS TRIBUNE
National Bank of Pakistan (NBP) has suffered a hit to its profits in the first half of 2013 – amid the low-interest rate environment – reporting consolidated earnings of Rs6.92 billion, a fall of 30% compared to what it earned in the corresponding period a year ago.Continuously shrinking net interest margins as the central bank pursued an expansionary monetary policy during the period ie slashing interest rates amid falling inflation, and abnormally high provisioning expense has reversed the fortunes of the bank which reported stellar earnings in 2012…, core income of the bank – net interest income – witnessed a drop of 4.7% due to decline in the discount rate and escalating interest expensed upon the savings rate paid on average balance. Total provisions were reported at more than double, 122% to be exact, over the previous corresponding period at Rs7.4 billion, with provisioning against bad loans contributing the highest as it grew by 2.5 times to Rs6.53 billion, compared to Rs2.57 billion in the first half of 2012. Resultantly, net income from core operations of the bank were reported 28% lower at Rs13.09 billion.
Non-core income (earnings from fees, dividends and investments) was the silver lining for the bank as it witnessed growth. NBP recorded 20% higher non-interest income of Rs14.1 billion, owing to a booming stock market as it made Rs2.78 billion by trading securities, and hefty profits earned from joint ventures. Share of profit from joint ventures was 20 times higher at Rs383 million…, NBP was planning to re-launch Islamic banking under the product name ‘Aitmaad’ by the end of third quarter of 2013 by aggressively adding Islamic branches to its nationwide branch network. The bank is targeting to add 100 Islamic branches in 2013…. EXPRESS TRIBUNE
On Wednesday, Pakistan Petroleum (PPL) – the country’s second largest oil and gas explorer – announced its earnings with growth slowing down as higher field expenditures ate up its increase in revenues…. PPL earned Rs49.95 billion in the fiscal year 2012-13, 3% higher than Rs40.92 billion it made last year. The result announcement was also accompanied with a cash dividend of Rs5.5 per share, taking cumulative payout for the year to Rs10.5, along with a 20% bonus share issue – one share for every five ordinary shares.
Out of the earnings, the oil and gas explorer also appropriated Rs5 billion each towards the Insurance Reserve and the Assets Acquisition Reserve. In the period, PPL also acquired a 100% stake in PPL Europe E&P for Rs15.7 billion, the company’s statement of equity for the year revealed. During the year, PPL’s revenues grew 7% to Rs102.35 billion, mainly on the back of increased oil production amid higher oil prices as production from Nashpa Block and Makori East, MamiKhel and Tal Block jump. Moreover, the failing rupee against the dollar also helped in top-line growth as PPL receives its income in US dollars.
According to news report by The Express Tribune on March 12, PPL also won a provisional grant of 11 strategically-fit exploration blocks spread across Sindh, Punjab and Balochistan. The company committed a total of 6,445 work units, which translated into a minimum financial obligation of $64.45 million; though actual investment may be significantly higher on discharging the work commitment. However, the growth in revenues was partially offset by the company’s surging field expenditures, which crossed Rs30.6 billion, due to an uptick in exploration activities. PPL has announced four significant discoveries since the incumbent government took office. But since the discoveries are not realised, the company can expect a boost in cash flows going ahead.
Another factor that absorbed revenue growth was a fall in other income. Other income declined 41% to Rs6.89 billion as the company booked a one-time reversal of provision for workers welfare fund of Rs4.4 billion in fiscal 2012. Resultantly, profit before tax fell by around Rs2 billion to Rs62.63 billion in 2013 compared to 2012. Lower tax rates helped the company post a growth in profits as the company paid taxes on a higher rate in 2012….EXPRESS TRIBUNE
Fauji Cement Company Limited announced a profit of Rs2.09 billion and earnings per share of Rs1.42 in financial year 2012-13, up 279% over earnings of Rs.553 million and EPS of Rs.0.29 a year earlier.The company declared a higher-than-anticipated final cash dividend at Rs1.25 per share, ….Revenues grew 39% to Rs15.97 billion because of higher cement prices in FY13 over FY12 and a 17% increase in sales to 2.5 million tons following capacity expansion of its plant,….On a quarterly basis, the company saw its earnings fall 19% to Rs526 million in the fourth quarter compared to the previous quarter.
Revenues rose 6% quarter-on-quarter on the back of a 2% increase in cement prices to Rs464 per bag and a 4% improvement in demand, …In the quarter, gross margins dropped three percentage points to 30% compared with 33% in the third quarter and 35% in the second quarter.The lower margins were the result of gas shortage for captive power plants and rising electricity tariffs, though coal cost was declining, Global Research said. Apart from this, higher international and local freight charges were also expected to have increased final cost for the company’s coal inventory, …The company’s finance cost fell 17% year-on-year to Rs1.5 billion, aided by lower rupee depreciation in FY13 when the currency slid 5.2% compared to 9.9% in FY12….. EXPRESS TRIBUNE
On its first day of listing on the Karachi Stock Exchange (KSE), Lalpir Power hit its upper lock as soon as the trading session began on Tuesday ….The price of Lalpir Power, whose symbol on the bourse is LPL, increased 5% to Rs23.10 within minutes of the beginning of the trading session. The stock was offered at Rs22 per share. With a price appreciation of Re1.10, the total turnover in the Lalpir stock on Tuesday was 461,500. An independent power-producing company based out of Muzaffargarh, Punjab, Lalpir Power has a gross production capacity of 362 megawatts.
“According to our estimates, the fair price of the stock is Rs24.50. We expect trading in this stock will remain bullish in the next few days,” said AKD Securities’ Syed Khurram Shahid while speaking to The Express Tribune after the gong-striking ceremony. AKD Securities, along with Next Capital, served as arranger and book runner for the offer. Shahid said his brokerage house estimates the company will post earnings per share of Rs3.5-Rs4.0 in December. “I believe the share price might increase to around Rs28 by the end of the calendar year,” he added.
The company, which is part of Mian Muhammad Mansha’s business empire, unveiled its plan to sell 37.9 million ordinary shares – or 10% of its total paid-up share capital through a two-phase process in June.In the first phase of the sale of shares, also referred to as the book-building portion of the sale of shares, that took place on June 18 and 19, the company offered 28.4 million ordinary shares – or 75% of the total offer size – at a floor price of Rs15 per share to institutional investors and high net-worth individuals. The response was overwhelming, as buyers oversubscribed the offer 5.9 times.Afterwards, book runners for the offer determined the cut-off/strike price of Rs22 per share through the Dutch Auction Method, an auction structure in which the price of the offering is set after taking all bids and determining the highest price at which the total offering can be sold.
The first phase was followed by the general public portion, which put 9.4 million ordinary shares of the company, or 25% of the total offer size, up for grabs….. EXPRESS TRIBUNE