AKD Quotidian about — LUCK: 1QFY13 Result Preview

Karachi, October 24, 2012 (PPI-OT): Lucky Cement Limited (LUCK) is scheduled to announce its 1QFY13 result on Oct 25’12.

According to AKD Securities expects the company to post earnings of PKR 2.03 billion (EPS: PKR 6.27) compared to earnings of PKR 1.50 billion (EPS: PKR 4.66) during the corresponding period last year, a growth of 34.6%YoY. AKD Securities’ earning expectations are premised on flat YoY sales with local despatches at 819k tons and exports at 618k tons with growth likely on account of i) ex-factory average local price of PKR 381 per bag and export price of US$64 per ton, ii) subdued coat prices with average 1QFY13 coal price at US$87 per ton and average freight at US$16 per ton and iii) lower financial charges with finance cost expected at just PKR 75.7 million compared to PKR 119.4 million in 1QFY12. Gross margin (GM) in 1QFY13 is expected to improve to 40.3% compared to 38.9% in 1QFY12 and 39.0% in 4QFY12. AKD Securities’ estimates incorporate an effective tax rate of 14% where difference in this regard could cause earnings to deviate either way from AKD Securities’ estimates. LUCK has been in the news off-late owing to its acquisition (along with other group companies) of ICI Pakistan Ltd. wherein the consortium has recently made an offer to acquire a further 11.2 million shares (12.1%) from the general public at a price of PKR 186.4 per share. Given strong and sustained cash flow generation, with full year FY12 operating cash flow at PKR 9.4 billion, AKD Securities believes the acquisition is likely to be carried out from internal sources. At current levels, LUCK offers an upside of 11% to AKD Securities’ target price of PKR 154.4 – Accumulate!

NML: 1QFY13 Result Preview

Nishat Mills Limited (NML) is scheduled to announce its 1QFY13 result tomorrow where AKD Securities expects NPAT of PKR 1,039 million (EPS: PKR 2.96), flattish compared to NPAT of PKR 1,031 (EPS: PKR 2.93) in 1QFY12 but sequentially up by 3.7%QoQ. AKD Securities expects that NML, one of the largest composite units in Pakistan, will be a direct beneficiary of the boom in cotton yarn demand coupled with PKR depreciation against the US$. For FY13, AKD Securities expects NML’s spinning unit to witness greater utilization levels (FY12: 86% vs. 99% for NCL’s spinning plant), which should compensate lower product prices. In 1QFY13, AKD Securities expects 1.1pptQoQ gross margin expansion on the back of 2.7%QoQ depreciation in PKR /US$ parity and higher volumetric sales, particularly of cotton yarn. Despite expected increase in core profitability, the bottomline is expected to remain flattish due to lower dividend income. AKD Securities retains AKD Securities’ liking for NML where AKD Securities’ Jun’13 TP of PKR 71/share offers an upside of 18% from current levels.

NML: 1QFY13 Result Preview

The Board of Directors of Pak Suzuki Motor Company (PSMC) is scheduled to announce the company’s 9MCY12 financial result tomorrow (Oct 25’12). AKD Securities expects the company to post NPAT of PKR 1,575 million (EPS: PKR 19.14) in 9MCY12 vs. NPAT of PKR 672 million (EPS: PKR 8.17) in the corresponding period last year, a growth of 2.3xYoY. AKD Securities expects gross margins in 9MCY12 to increase by t97bpsYoY to stand at 5.75% on account of increased selling prices and reduced steel costs. In 3QCY12 alone, AKD Securities expects the company to post NPAT of PKR 206 million (EPS: PKR 25) vs. NPAT of PKR 393 million (EPS: PKR 4.77) in 3QCY11 and NPAT of PKR 781 million (EPS: PKR 9.48) in 2QCY12, showing a decline of 48%YoY and 74%QoQ, respectively. In 3QCY12, company sold 17,659 units which are down 43%QoQ where sates were impacted by the imports of used cars and higher product prices. AKD Securities foresees the present trend of sales to continue in the next quarter as well. However, fortunes of auto assemblers are likely to improve going forward on chances of a more restrictive auto import policy and benign outlook for steel and JPY. Currently PSMC is trading at CY13F PER of 5.6x and offers upside of 30% to AKD Securities’ target price of 125/share. Buy!

SECP permits AMCs to offer commodity schemes – Alfalah Securities Limited

Karachi, October 24, 2012 (PPI-OT): Securities and Exchange Commission of Pakistan (SECP) has given permission to asset management companies (AMCs) to offer commodity schemes which is a type of Mutual Fund with commodities as the main investment avenue.

According to Alfalah Securities Limited, the investments in commodities by the fund will be made only be made through future contracts, which are traded on an organized exchange such as Pakistan Mercantile Exchange (PMEX) and having commodities as underlying assets.

The commodity funds are required to invest at least 70% of their assets in commodity future contracts, which include both cashsettled as well as deliverable contracts. Moreover, commodity schemes must maintain at least 10% of their net assets in cash and near cash instruments. It is a positive development for the mutual fund industry as it will increase the depth of the mutual fund market with the addition of new type of collective investment scheme.

Morning Call about Results Preview – Arif Habib Limited

Karachi, October 24, 2012 (PPI-OT): NPL and PSMC

NPL; Earnings are likely to register a 27% YoY increase

Nishat Power Limited’s (NPL) board of directors is scheduled to approve and announce its 1QFY13 financial results on October 25, 2012.

According to Arif Habib Limited expects the company’s profit after tax to clock in at PKR 548 million (EPS: PKR 1.55), compared with PKR 431 million (EPS: PKR 1.22) in 1QFY12, depicting a 27% YoY increase. This growth is anticipated on the back of 13% YoY lower finance cost, as recovery from overdue receivables is supposed to ease off heavy short term borrowings. NEPRA’s data indicate that the company operated at a load factor of 62% in July 2012, forming the basis of Arif Habib Limited’s 65% load factor assumption in 1QFY13.

Financial Highlights
PKR million 1QFY13E 1QFY12 YoY 4QFY12 QoQ
Sales

5,460

6,264

-13%

5,396

1%

Cost of Sales

4,254

5,071

-16%

4,104

4%

Gross Profit

1,206

1,193

1%

1,292

-7%

Administrative Expenses

22

20

11%

20

9%

Other Operating Income

16

6

188%

25

-36%

Profit from Operations

1,200

1,179

2%

1,297

-8%

Finance Cost

651

746

-13%

696

-6%

Profit before taxation

548

433

27%

601

-9%

Profit after taxation

548

431

27%

613

-11%

Earning per share (PKR)

1.55

1.22

27%

1.73

-11%

Source: AHL Research          

PSMC; Earnings expected to lower by 57% QoQ

The Board of Directors of Pak Suzuki Motor Company Limited (PSMC) is scheduled to meet on October 25, 2012 to approve the financial results for 3QCY12. Arif Habib Limited expects the company to earn profit after tax (PAT) of PKR 338 million (EPS: PKR 4.10) in 3QCY12, decline of 57% QoQ. The decrease in profitability is primarily due to 1) 33% QoQ decline in sales volume to 17,659 units, which leads to 37% QoQ decline in the company’s top-line to PKR 11 billion 2) Gross margin dropped by 129 bps and stood at 5.9%, this was on account of cost burden of Euro-II compliance and impressive sales volume in 2QCY12 due to expected discontinuation of factory fitted CNG vehicles and Punjab government taxi scheme, under which 20,000 units were delivered to government of Punjab which reduces fixed cost 3) Discontinuation of Alto which comprises approximately 16% of total sales 4) Strong competition from imported Japanese cars to economy segment (1000 cc and lower) which is company’s primary target market for sales.

Financial Highlights (PKR million)
  3QCY12E 2QCY12A QoQ 9MCY12E 9MCY11A YoY
Sales

11,114

17,707

-37%

47,585

38,549

23%

Cost of sales

10,458

16,433

-36%

44,677

37,090

20%

Gross profit

656

1,273

-49%

2,908

1,458

99%

Distribution and

admin. Costs

264

322

-18%

840

722

16%

Other income

166

206

-19%

498

464

7%

Finance cost

5

2    98%

11

13

-15%

Profit before tax

519

1,075

-52%

2,383

1,100

117%

Taxation

182

294

-38%

676

429

58%

Profit after tax

338

781

-57%

1,707

672

154%

Earning per share

4.10

9.48

20.74

8.16

Source: Company financials and AHL Research

PIA gets fresh PKR 9.36 billion loan – Alfalah Securities Limited

Karachi, October 24, 2012 (PPI-OT): Economic Coordination Committee (ECC) has approved the issuance of guarantee for fresh loan of PKR 9.36 billion for PIA along with extension of government guarantee for 2 years on Sukuk Certificates of PKR 6.8 billion.

According to Alfalah Securities Limited, this is done to provide some relief to the national carrier – PIA as it is facing liquidity crunch for the last several years because of operational inefficiencies, high oil prices, depreciation of Pak rupee against USD and aging fleet.

Duty reduced for Motorcycle industry – Alfalah Securities Limited

Karachi, October 24, 2012 (PPI-OT): ECC has reduced the duty in range of 10 – 17.5% for different categories of components/kits used by motorcycle industry.

According to Alfalah Securities Limited, the rate of duty has been reduced for Completely Built Unit (CBU) and components from existing 20% to 10% and CBU and components for assembly/manufacture of vehicle in any form of kit from 65% to 50%. ECC has also reduced import tariff on Completely- Knocked-Down (CKD) kit from existing 15% to 5% and on locally manufactured CKD kit the duty has been lowered from existing 47.5% to 30%. The measure is taken to promote the motorcycle industry in Pakistan.

Imperial Chemical Industries announce after tax profit of Rs764million

Karachi, October 24, 2012 (PPI-OT): The Board of Directors of ICI Pakistan Limited is pleased to announce the financial results for Q3 2012.

The company posted net sales income of PKR 8.7 billion and PKR 25.4 billion for the quarter and nine months ended September 30, 2012 respectively which was 3% and 6% lower than same period last year. Operating result for the quarter and nine months at PKR 521 million and PKR 1,270 million were both 32% lower compared to same period last year.

Sharp reduction in margin over the feedstock prices as well as lower sales volume in the PSF Business with blend economics favouring cotton and significantly higher energy cost played a major role in dragging down the operating results.

EPS from continuing operations for the nine months ended September 30 2012 at PKR 8.27 was lower by 20 percent compared to same period last year.

Other Information
Nine Months Ended September 30, 2012
Net Sales Income PKR 25,417 million
Profit before taxation PKR 1,171 million
Profit after taxation PKR 764 million
Earnings per share PKR 8.27 million

For more information, contact:
Seemi Saad
Manager Corporate Communications and Public Affairs
ICI Pakistan Limited
Tel: +9221 3531 3821 – 24
Fax: +9221 3531 3832
Email: seemi.saad@akzonobel.com

International Clearing House Board Meeting held at Pakistan Telecommunication Company

Karachi, October 24, 2012 (PPI-OT): The Second round of International Clearing House (ICH) Board meeting was held at Pakistan Telecommunication Company Limited (PTCL) HQ’s.

PTCL Senior Executive Vice President (SEVP) Corporate Development, Sikandar Naqi welcomed the participants of the meeting. In the first session, the ICH board deliberated on agenda items including the ICH business for the last 21 days and approvals were accorded regarding matters pertaining to ICH business.

In the second session, a presentation was made to Secretary Ministry of Information Technology Mr. Amir Tariq Zaman Khan and his team comprising Member Law and Member Telecom. The ICH Committee apprised the participants regarding the performance of ICH since its inception.

ICH has earned valuable foreign exchange during the first 21 days of ICH business. ICH has also generated huge funds for development funds to be allocated to Universal Service Fund (USF).

The resulting increase in revenue will lead to an increase in Income Tax which will be paid to the Government of Pakistan by LDI operators.

All the participants appreciated the increase in foreign exchange inflow and stabilization of Government of Pakistan approved settlement rate for international traffic terminating in Pakistan. The ICH board also accorded approvals regarding appointment of independent auditors and other matters pertaining to ICH business.

A question answer session was also held with Secretary MoIT and his team to deliberate on the opportunities and challenges with regards to ICH.

For more information, contact:
Pakistan Telecommunication Company (PTCL)
F-8 Exchange, Nazim-Ud-Din Road F-8/1,
Islamabad
Tel: +9251 111 20 20 20
Fax: +9251 111 21 21 21
Email: shahzad.khalil@ptcl.net.pk