Home / Brokerage / Morning Call about LOTPTA, HUBC, PSMC & NML for the period ended September 2011 – Arif Habib Limited

Morning Call about LOTPTA, HUBC, PSMC & NML for the period ended September 2011 – Arif Habib Limited

Karachi: LOTPTA; Lower margins may drag earnings by 37% QoQ

According to Arif Habib Limited, The board of directors of Lotte Pakistan PTA Limited (LOTPTA) is scheduled to meet on October 26, 2011 to approve the financial result for 3QCY11. Arif Habib Limited expects the company to post profit after tax (PAT) of PKR 767mn (EPS: PKR 0.51) in 3QCY11, a 37% decline, when compared with PAT of PKR 1,210mn (EPS: PKR 0.80) in 2QCY11. This is expected on account of a 24% QoQ drop in the spot primary margins which averaged out to USD 194/ton during 3QCY11. On cumulative basis of 9MCY11, the company is likely to post PAT of PKR 4,465mn (EPS: PKR 2.95) compared to PKR 3,187mn (EPS: PKR 2.10) in the corresponding period last year, anticipating a 40% YoY growth. Besides improved primary margins, almost 3x YoY increase in the finance income are expected to the primary factors behind this 40% YoY growth.

 

Financial Highlights
PKR mn 3QCY11 2QCY11 YoY 9MCY11 9MCY10   YoY
Net sales  13,895  14,710 -6% 44,556 30,612 46%
Cost of sales (12,663) (12,917) -2% (37,667) (25,901) 45%
Gross profit 1,231  1,793 -31%  6,888 4,711 46%
Operating profit  905  1,520 -40% 5,908 4,382  35%
Financial income 257 242 6% 770 257 199%
Financial charges (66)  (76) -13% (198) (178) 11%
Profit before tax 1,096 1,686 -35%  6,481 4,461 45%
Profit after tax 767 1,210 -37% 4,465 3,187 40%
EPS (PKR) 0.51 0.80 2.95 2.10
Source: Company financials and AHL Research

 

HUBC; Profitability to jump by 20% YoY in 1QFY12

The Board of Directors of Hub Power Company Limited is scheduled to meet on October 26, 2011 to announce the 1QFY12 results. According to Arif Habib’s estimated company will post an earning of PKR 1,519mn (EPS: PKR1.31) in 1QFY12 as compare to PKR 1,269mn (EPS: PKR1.10) in 1QFY11, depicting a jump of 20% YoY. This rise in earnings is attributable to 6% increase in Project Cost Equity (PCE), 1.84% (QoQ) depreciation of Pak Rupee against Green back and with the start of operations by Narowal Project. However earnings are expected to erode due to the higher financial charges on the back of short term borrowing, capitalization of Narowal project and penal interest charged by PSO on the account of late fuel payments. For the 1QFY12 Arif Habib Limited does not foresee any payout by the company.

 

Financial Highlights (PKR mn) 1QFY12 1QFY11 % Chg.
Turnover  39,022 25,200 55%
Operating Cost 36,362 23,274 56%
Gross Profits 2,660 1,926 38%
Other Income 7 10 -29%
General and Admin Expenses 148   108 37%
Finance Cost 999 559 79%
PAT 1,519 1,269 20%
EPS 1.31 1.10 20%
Source: Company Financials & AHL Research

 

PSMC; Higher margins to propel earnings by 27% YoY

Pak Suzuki Motor Company is scheduled to announce its 9MCY11E financial result on October 26th, 2011. The company is expected to post profit after tax (PAT) of PKR 492mn (EPS: PKR 5.98) compared to PKR 388mn (EPS: PKR 4.71) reported in the same period last year, a rise 27% YoY. This is primarily driven by higher gross profit margin coupled with higher volumetric sales to 67,979 units, an increase of 17% YoY. Higher income is likely to drop by 8% YoY to PKR 406mn despite higher volumes due to drop in bank deposits driven by blockade of funds in WHT deducted at custom stage.

 

P&L Highlights (PKR mn) 3QCY11E 2QCY11A QoQ 9MCY11E 9MCY10A YoY
Net Sales 15,510 10,681  45% 38,760 31,502 23%
Cost of sales 14,920 10,200 46% 37,347 30,517 22%
Gross profit 589 481 23% 1,413 985 43%
Distribution expenses 100 69 45% 240 159 50%
Other income 135 139 -3% 406 442 -8%
Profit before taxation 328 326 1%  874 721 21%
Taxation 115 138 -17% 382  333 15%
Profit after tax 213 187 14% 492 388 27%
EPS (PKR)  2.59 2.28 5.98 4.71
Source: AHL estimates & company accounts

 

NML; Earnings to remain 9% higher in 1QFY12

For 1QF12, Arif Habib Limited expects the company to post net income of PKR 1,466mn (EPS: PKR 4.17) as compared to PKR 1,350mn (EPS: PKR 3.84) in 1QFY11, depicting a growth of 9% YoY on standalone basis. This increase in earnings is attributable to increased dividend income received from the subsidiaries, pushing up the other income by 412%. Company will book a dividend of PKR 3.0 and PKR 5.0 in 1QFY12 from MCB and Pakgen Limited respectively. This will generate PKR 688mn for the company, with an after tax impact of PKR 1.76/share. The company is scheduled to announce its 1QFY12 results on October 26, 2011.

 

Financial Highlights (PKR mn) 1QFY12 1QFY11 %Chg.
Sales  13,610  9,961 37%
Cost of Goods Sold 11,500 7,822 47%
Gross Profit  2,110  2,138 -1%
Distribution & Admin Expenses 905  584 55%
Other Operating Expenses 122 119 3%
Other Operating Income  950 357 166%
Profit from Operations 2,033 1,792 13%
Finance Cost 386 315 23%
Profit before Tax 1,647 1,478 11%
Taxation 181 128 42%
Profit after Tax 1,466 1,350 9%
EPS (PKR)  4.17 3.84  9%
Source: Company Financials & AHL Research

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