AKD Quotidian about — ENGRO: 1QCY13 Result Preview

Karachi, April 23, 2013 (PPI-OT): ENGRO will be announcing its IQCYI3 result on Apr 29 ’13.

According to AKD Securities expects the company to post NPAT of PkR1.932mn (EPS: PKR378) in 1QCY13 compared with NLAT of PkR649mn (LPS: PkR1.27) in `tQCYI2. On a sequential basis, earnings are expected to increase by 9%QoQ. Major turnaround story for 1QCY1Z is the fertilizer subsidiary which yesterday posted  IQCYI3 NPAT of PkR646mn, compared to NLAT of PkRI.420mn in IQCYI2 with earnings primarily driven by strong rebound in urea off take as well as increased production from ENVEN.

Furthermore, gross margins jumped l5pptYoY/9ppt QoQ to 43% where margins were driven by higher off take as well as production from ENVEN, which benefits from better fuel efficiency as well as slightly lower feed gas cost (gets around lOmmcfd-l5mmcfd of subsidized feedstock gas from SNGP). Eximp’s loss is expected to shrink to PkR43mn in IQCY13 compared with a loss of PkR435mn in 1QCY12 on improving rice operations as well as better DAP trading margins. In AKD Securities views, CVI 3 will be a turnaround year for ENGRO given improving dynamics of EFERTS, EPCL and EXIMP, while the EFOODS growth story remains intact. ENGRO offers healthy upside of 59% to AKD Securities Dec13 TP of PkR2O8/share. Buy!

9MFY13 Textile Export Review

Trade Data released by PBS reveals that, after lacklustre growth in the two preceding months, textile exports are finally on the upswing with overall textile exports increasing by 18%MoM to US$1 .167bn in Mar’ 13. Yarn exports improved significantly clocking in at US$208mn, the highest monthly yarn exports since Feb’11. However, monthly Average Unit Price (AUP) of yarn has increased by only 2.47% since Dec’12 to US$3,073/ton in Mar’13 while over a similar period Cot look A increased by 13% over Dec’12 levels to an average price of US$0.94/lb in Mar’13. This apparent inability to pass on the price increase in Textile Exports: Major Categories