Engro makes a strong comeback

Engro Corp – the biggest conglomerate in Pakistan – has posted a record consolidated profit after tax of Rs8.18 billion for the year ending on December 31, 2013, up 529% compared to a depressed profit after tax of Rs1.3 billion in 2012. Earnings per share (EPS) of the company jumped to Rs16.01 for the year ended December 31, 2013 compared to an EPS of Rs2.61 in 2012. The comp any revenue jumped sharply to Rs155.4 billion in 2013 against Rs125.2 billion in 2012. The record profitability was achieved by a turnaround in its fertiliser business coupled with an impressive performance by Engro Polymer, a healthy contribution by Engro Vopak and EXIMP’s return to profitability.

Engro Fertilizer

During 2013, the company made a profit after tax of Rs5.49 billion compared to a loss of Rs2.93 billion last year. Engro Fertilizer’s revenue for the year was Rs50.12 billion compared to Rs30.62 billion in 2012. Sales of the company’s blended fertilisers (Zarkhez and Engro NP) for the year increased by 21% to 95,000 tons compared to 80,000 during 2012. Pakistan’s overall potash market remained stable at 20,000 tons (nutrient basis) during 2013. The company undertook an Initial Public Offering (IPO) of 75 million ordinary shares in fourth quarter of 2013 (4QCY13).

Engro Foods

2013 was a test of the company’s resilience due to external challenges, coupled with distribution issues, which impacted its volumes and profitability. Engro Foods’ revenues declined from Rs40.16 billion in 2012 to Rs37.89 billion in 2013, while net profits decreased from Rs2.59 billion in 2012 to Rs1.09 billion in 2013.

Engro EXIMP

EXIMP’s revenues during 2013 were Rs32.85 billion compared to a revenue of Rs20.97 billion in 2012. The company’s consolidated profit after tax stood at Rs59 million in 2013 as compared to a loss of Rs426 million in 2012. The profitability of fertiliser and commodity trade was off-set by losses in the rice business despite improvement in operational parameters.

Engro Powergen

Engro Powergen Qadirpur earned a net profit of Rs1.45 billion during 2013 compared with Rs2.1 billion in year 2012. During the year 2013, the Qadirpur Plant demonstrated billable availability of 83.1%. It dispatched a total Net Electrical Output of 1,334 Gigawatt hours to the national grid with a load factor of 71.7% as compared to 93.8% in 2012. Overdues from Pakistan Electric Power Company stood at Rs1.248 billion as on December 31, 2013, against overdues of Rs5.787 billion as on December 31, 2012. Overdue amount payable to Sui Norther Gas Pipeline Company on December 31, 2013 was Rs386 million compared to Rs2.68 billion in 2012.

Polymer and Chemicals

During 2013, the company posted a profit of Rs707 million compared to Rs77 million in 2012. Revenue increased from Rs20.60 billion in 2012 million to Rs24.78 billion in 2013. The company achieved its highest ever production of vinyl chloride and caustic soda during the year.

Vopak

During the year, the company modified its ACN tanks which were unused since 2010 and brought these under use for storage of EDC for Engro Polymer. Actual throughput for the year was 1,135 KT compared to 1,101 KT in 2012. The company’s revenue was Rs2.05 billion in 2013 as compared to Rs2.37 billion in 2012. The profit after tax for 2013 was Rs1.21 billion compared to Rs1.48 billion in 2012.

LNG

Elengy Terminal Pakistan Limited (EPTL), a subsidiary of Engro Corporation Limited, won the government’s tender for Fast Track LNG in November 2013 and is poised to sign the contract this month….. EXPRESS TRIBUNE

MCB AND ALLIED BANK RESULTS

Net profit of MCB Bank for 2013 clocked in at Rs21.5 billion, 4% higher than its earnings of Rs20.7 billion last year, according to the bank’s unconsolidated financial results released on Tuesday. In the last quarter of 2013, MCB’s earnings went up 8% year-on-year mainly on the back of its non-markup income and provisioning reversals. The bank also announced a cash dividend of Rs3.5 per share and 10% bonus shares….. Data released by the State Bank of Pakistan (SBP) says the net spread of MCB in the first nine months of 2013 remained 2.9% as opposed to 3.5% in the comparable period of 2012. Net interest income of MCB dipped 7% and 3% on an annual and quarterly basis respectively, according to the unconsolidated profit and loss statement. However, non-markup income posted strong growth of 22% year-on-year due to gains from the sale of Unilever Pakistan and Adamjee Insurance shares, Global Securities said. “Improved recoveries of non-performing loans (NPLs) helped the bank register provisioning reversal of Rs2.8 billion in 2013 against the provisioning expense of Rs478 million in the preceding year. However, the positive impact of provisioning reversal was contained by an increase in non-markup expense that surged by 9% year-on-year, which is slightly higher than the CPI inflation of 7.68% year-on-year in the stated period,”

ABL EARNINGS :

Higher net interest income and ‘tax add-back’ lifted the net profit of Allied Bank (ABL) to Rs14.6 billion in 2013, up 26% from the preceding year. According to Standard Capital Securities, ABL’s net interest income increased 18% to Rs21.7 billion compared with last year’s Rs18.4 billion mainly because of higher deposits and an expanding branch network. “In spite of higher earnings, the bank slashed its payout ratio to 37% for 2013. It announced Rs1.5 per share cash dividend and 10% bonus shares in the final quarter,” it said. The bank recorded a decrease of 30% in non-core business, which stood at Rs9.6 billion in 2013. ABL is also doing well with regard to non-performing loans (NPLs) and recorded a 13% lower provisioning cost to Rs565 million,…. EXPRESS TRIBUNE

 

Engro Fert back in black with Rs.5.49 billion profit

Engro Fertilizer − part of Pakistan’s largest conglomerate Engro Corp − returned to profit and posted net earnings of Rs5.49 billion for the year ended December 31, 2013 compared to a loss of Rs2.93 billion in the previous year. Earnings per share (EPS) rose to Rs4.66 against a loss per share (LPS) of Rs2.59 in the previous year. Sales of the company jumped by a significant 64% to Rs.50.12 billion compared to Rs30.62 billion in 2012. The growth in earnings is primarily attributable to better production at Engro’s Enven plant, which was shifted to the Mari gas system. Moreover, gas supply from Guddu gas field increased after July 2013. According to Engro, both plants of the company run at around 80% of capacity for most part of the second half (July-December) of the year. It is because of this reason that Engro reported urea off-take at 1.56 million tons, up 66% compared to 0.94 million tons in 2012. Owing to continuous operations since July, higher operational efficiencies enhanced gross margins by 12 percentage points to 44% in 2013 from 32% a year earlier.

Moreover, other income increased two times to Rs1.1 billion while financial charges dropped 19% to Rs8.7 billion, lending support to the bottom line of the company. On a quarterly basis, profit stood at Rs2.3 billion (with EPS at Rs1.74) in the fourth quarter compared to profit of Rs43 million (with EPS at Rs0.03) in the same quarter of 2012. …. EXPRESS TRIBUNE

DIVIDENDS / RESULTS FOR FEBRUARY 2014

PTC :  10% CASH – EPS : 2.49

EPCL :  EPS : 1.07

EFERT : EPS : 4.66

CHCC :  10% CASH + 10% BONUS. EPS : 7.43

ABL :  15% CASH + 10% BONUS . EPS : 14.07

MCB :  35% CASH + 10% BONUS . EPS : 21.34

DGKC :  EPS : 6.09

KOHE :  20% CASH . EPS : 2.96

NPL : 10% CASH . EPS : 3.77

ENGRO : SPECIAL DIV. 10% EFERT SHARES

NML :  EPS : 10.96

KOHC : EPS : 9.54

KAPCO : 27.5% CASH . EPS : 3.23

FCCL : 7.5% CASH . EPS : 0.94

HUBC : 25% CASH . EPS : 2.54

NCL : EPS : 6.33

NCPL : 15% CASH . EPS : 3.25

PAKT : 60% CASH . EPS : 12.33

PSO :

PRL :  EPS :   – 35.74

UBL :  40%  CASH . EPS : 15.21

ICI : EPS : 8.29

MLCF : EPS :  2.81

OGDC : 20% CASH . EPS : 15.63

LUCK :  EPS : 15.96

NBP :

FFC sees a slight dip in profit

Fauji Fertilizer Company (FFC) has posted a net profit of Rs.20.13b in the year ended on December 31, 2013, down 3.5% from Rs20.86 billion in the previous year. Earnings per share (EPS) of the company were at Rs15.83 in year 2013, down 3% compared to an EPS of Rs16.38 the in previous year. The result was also accompanied by a final cash dividend of Rs.4.00 making a full year cash dividend of Rs15.35 per share.Due to stagnant volumetric off-take of 2.4 million tonnes and stable urea price in 2013, the company’s sales revenue remained flat at Rs74 billion.

However, a higher increase in cost due to rise in fuel cost contracted gross margins by 2 percentage points to 46% in 2013 as against 48% in previous year, ……Furthermore, higher distribution cost (up 11% to Rs6.1 billion) also heavily restricted bottom-line of the company. In fourth quarter of 2013 (4Q2013), FFC posted an EPS of Rs4.12, down 25% as against an EPS of Rs5.53 in the same period last year as company sold 21% more urea in 4Q2012 due to heavy stocks of previous months…...EXPRESS TRIBUNE

Fauji Fertilizer Bin Qasim posts rise in earnings

Fauji Fertilizer Bin Qasim (FFBL) on Monday posted a profit after tax of Rs5.6 billion in the year ending on December 2013 (CY2013), up 30% compared to a profit of Rs4.3 billion in the same period the previous year. Earnings per share (EPS) for the company jumped to Rs6.01 compared to Rs4.64 in the period under review. The company also announced a final dividend of Rs.2.25 making full year cash dividend of Rs5 per share (Rs4.5 in year 2012).

The company’s revenue increased by 14% to Rs54.5 billion as against Rs47.9 billion posted in the previous year. The increase in di-ammonium phosphate (DAP) off-take is the key reason behind the rise in the revenue which increased by 26% to 770,000 tons in 2013. However, urea off-take declined by 4% as compared to the last year.

Other income of the company fell to Rs494 million in 2013 against Rs1.04 billion in the same period last year, primarily due to loss of Rs163 million from its JV Pakistan Maroc Phosphore (PMP) compared to the profit of Rs6.7 million in the last year.Only in the fourth quarter of 2013 (4Q2013), the company posted an EPS of Rs2.48, up 5% compared to an EPS of Rs2.36 in 4Q2012.

AKD Securities said in a report that a margin contraction is expected in the first quarter of calendar year 2014 (1QCY14) as a result of the recent hike in Gas Infrastructure Development Cess (GIDC) and scheduled gas outage expected till February 2014, while a recent uptick in international DAP price may lead to a recovery in local price going forward…. EXPRESS TRIBUNE

Fall in profits leaves sour taste for Engro Foods

Engro Foods on Friday announced disappointing results and posted a profit-after-tax of Rs870 million for the year ending December 2013, down by 66% compared to Rs2.6 billion in the same period of previous year. The earnings per share (EPS) dropped to Rs1.14 compared to EPS of Rs3.43 during the period under review.

Engro Foods − a subsidiary of Engro Corp, Pakistan’s largest private-sector conglomerate − saw weak sales during the year that declined to Rs37.9 billion, down by 6% year on year (YoY) against sales of Rs40.2 billion. Last year was a particularly tumultuous one for the company with the collapse of its distribution network, and an unexpected change in leadership which saw Sarfaraz Rehman take up his old post.The losses are attributable to Engro Foods’ Canada business (Netherlands BV, whose takeover was completed on December 16, 2013) where the company lost an estimated of Rs29 million, JS Global Research reported on Friday.

In fourth quarter (4Q) alone, the company booked a loss both on a reported and recurring basis primarily attributable to depressed gross margin of 13% in 4Q of CY13. In the same quarter, the company recorded a recurring pre-tax loss of Rs360 million (estimated 4Q recurring loss per share (LPS) at Rs0.45). Analysts say the depressed sales of the company are mainly because of the distribution issues facing the company, price competition with Nestle and overall slowdown in UHT milk market.“Corrective steps undertaken by the management for the company’s distribution issues are likely to start depicting results from the next quarter,” an AKD Research report said. “For calendar year 2014, the company is expected to be back on a growth path with an earnings of Rs2.0 billion.”….EXPRESS TRIBUNE

PPL posts 19% rise in first-half

Pakistan Petroleum Limited (PPL) on Wednesday announced an 18.8% rise in net profits for the six-month period ending December 2013 on the back of higher oil production, better prices and depreciation of the rupee, analysts said. It also announced an interim cash dividend of Rs5 per ordinary share and Rs3 on fully paid preference shares. Profit increased to Rs26.5 billion for the period, compared with Rs22.3 billion in the corresponding period last year, but it came at the cost of relatively lower field expenditure on finding new petroleum reserves.

The company’s revenues were up 15.4% to Rs58.5 billion despite a slight reduction in gas production, according to Global Research. “Revenues increased mainly due to rise in oil production and higher realised prices,” it said. Citing data, it said PPL’s oil production was up by 6% in quarter-on-quarter basis to 12,357 barrels per day between October and December 2014. This increase in production came from the company’s Nashpa-4 well, it said. “On a year-on-year basis, oil production for PPL has reportedly improved by 24% to 2.16 million barrels,” it said…. EXPRESS TRIBUNE

 

ENGRO RAISES FERTILIZER PRICES

Following the government’s move of reviving Gas Infrastructure Development Cess (GIDC), Engro Fertilizer has increased the prices of its urea fertiliser on Thursday – a practice expected to be followed by other players. The GIDC was first introduced by the PPP government in an effort to raise capital for infrastructure development, primarily for the Iran-Pakistan gas pipeline. However the Cess was repeatedly shot down by courts, until the Supreme Court finally gave the nod this year. The government on Wednesday revised the GIDC to raise Rs120 billion. “Engro Fertilizers Limited has increased its price of fertiliser from Rs1,722 to Rs1,900 per 50kg bag,” said an official statement. “This Rs178 price increase is directly proportionate to the increase in GIDC imposed by the government and taking into account the rate of inflation.”According to JS Global Capital, other fertiliser producers like Fauji Fertilizer, Fauji Fertilizer Bin Qasim Limited and Fatima Fertilizer are likely to follow suit to match Engro’s price hike.

Engro, however, urged the government to review its decision. “We encourage the government to reduce the increase in GIDC as well as reduce the amount of subsidy given on imported urea to increase revenue for the national exchequer,” its statement said.Since the government did not decrease the subsidy on imported urea, Engro believes that dealers, not farmers, would pocket the entire subsidy on imported urea.The company also said that this will result in huge outflows from the national exchequer, while simultaneously leading to huge gains for the sellers of urea who would buy imported urea at subsidised prices and sell it at market price.The GIDC on fertiliser feedstock has been increased by Rs103 per million british thermal units (mmbtu) to stand at Rs300 per mmbtu, with fuel GIDC rising by Rs50 per mmbtu to stand at Rs100 per mmbtu.

Impact on Karachi bourse

Most analysts say that the GIDC will be positive for Fatima Fertilizer given that the company’s production cost is buffered by its subsidised gas price agreement at $0.7 per mmbtu. According to a JS Global Capital report on Thursday, Fatima Fertilizer is likely to witness margin improvement due to peer-led urea price hike, which it estimates will have a positive impact of Rs0.40 per share (8% expected jump in FY2014’s earning per share)…. EXPRESS TRIBUNE

KSE among the top performers in 2013

The Karachi Stock Exchange (KSE) remained the 10th best stock market in 2013 with its benchmark index posting an annual return of 49.4%, translating into a 37% return in dollar terms, according to global financial news service Bloomberg. This is the second consecutive year when the Karachi stock market has been one of the world’s best-performing markets by posting a phenomenal return. The KSE-100 Index rose 48.9% in 2012 in rupee terms while the increase was 37% in dollar terms. The best-performing stock market in 2013 in dollar terms was Venezuela, which posted a return of 296%. It was followed by Dubai (108%), Abu Dhabi (63%), Bulgaria (48%), Ghana (44%), Nigeria (44%), Kenya (43%), Argentina (42%) and Ireland (39%).

“Pakistan’s 2013 return of 49% compares favourably with the last 10 years and 20 years (of) average annual return of 28% and 22% respectively.” Pakistan’s equity market in 2013 remained prominent in different indices managed by MSCI, which provides the global benchmark indices for equity investments. For example, MSCI Pakistan gained 38% in 2013, which is higher than the 21% gain that MSCI Frontier Markets (MSCI-FM) posted in the same year. Moreover, in Asian frontier markets, Pakistan ranked first, outpacing Sri Lanka, Vietnam and Bangladesh by a significantly vast margin, …..Higher foreign inflows played a significant role in making KSE one of the best-performing markets in the world. Foreign investors holding 36% free-float in the market and constituting 8% of KSE’s market capitalisation remained net buyers in 2013. “During the period, foreigners bought $2 billion and sold $1.6 billion (worth of equities), resulting in a net inflow of $403 million. It represents significant growth from last year’s net buying of $125 million,” ……In sheer percentage terms, the KSE-100 Index return was second only to Japan, according to Elixir Securities research analyst Fareesa Baig. Besides the first ever completion of a five-year term by a democratically elected government, she said Pakistan’s re-entry into the IMF programme and the European Union’s award of the GSP Plus status were some of the key positives of 2013. The outgoing year saw an annual improvement of 29% to 223 million shares a day while the value traded depicted an increase of 64%,…. EXPRESS TRIBUNE