AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, October 30, 2012 (PPI-OT): ENGRO will be announcing its 9MCY12 result later today.
According to AKD Securities expects the company to post NLAT of PKR 596 million (LPS: PKR 1.16) for the period under review as against NPAT of PKR 5,590 million (EPS: PKR 10.93) in 9MCY11. For 3QCY12, earnings are expected to slip back into the red where AKD Securities forecasts ENGRO’s NLAT to stand at PKR 255 million (LPS: PKR 0.50) as against a NPAT of PKR 309 million (EPS: PKR 0.60) in 2QCY12.
ENGRO: 9MCY12 Result Preview
| (NPAT million) | 9MCY12F | YoY | 3QCY12F | QoQ |
| Fertilizers |
(2,978) |
nm |
-1,246 |
300% |
| Foods |
1,591 |
290% |
601 |
13% |
| EPCL |
83 |
nm |
24 |
nm |
| Powergen |
1,603 |
29% |
538 |
5% |
| Eximp |
(982) |
nm |
-225 |
-30% |
| Vopak |
1,029 |
32% |
356 |
7% |
| Engro Corporation |
(596) |
nm |
-255 |
nm |
| EPS (PKR) |
(1.16) |
(0.50) |
|
|
Profitability less Minority Interest Source: Company Reports and AKD Research
Fertilizer to blame for 3QCY12 loss: ENGRO Fertilizer posted NLAT of PKR 1,246 million (LPS impact of PKR 2.44), with 4x QoQ increase in loss on lower urea offtake. While AKD Securities expects fertilizer fortunes to improve in CY13F on expectation of lower imports, however resolution of gas crisis will remain the long term panacea for fertilizer operations. For Eximp, AKD Securities expects a 30%QoQ decline in loss to PKR 225 million (LPS impact of PKR 0.44), mostly due to improving rice operations. The 3%QoQ depreciation of the PKR against the US$ is expected to boost earnings of Powergen (+5%QoQ) and Vopak (+7%Q0Q) for 3QCY12F.
HUBC: 1QFY13 Result Preview
The Hub Power Company Limited (HUBC) is scheduled to announce its 1QFY13 result tomorrow. AKD Securities expects the company to post earnings of PKR 2.3 billion (EPS: PKR 1.99) compared to earnings of PKR 1.2 billion (EPS: PKR 1.07) during the corresponding period last year, a significant growth of 85.4%YoY. While indexation factors (inflation, PKR devaluation) will contribute to the growth, major difference will arise from recognition of profit from Narowal operation post revised tariff in 4QFY13. The company had previously been booking losses from Narowal’s operations (1QFY12: PKR 168.1 million loss). In 1QFY12, AKD Securities expects the company to generate a cumulative 2,100 GwH of electricity, translating into a load factor of 68%, with inflation for the quarter at 9% and average exchange rate of PKR 93.7/US$. In line with payout history, AKD Securities does not expect any dividend in the IQ. HUBC has been under the spotlight of-late owing to news regarding a potential move by authorities to bring the company under the turnover tax regime. In this regard, AKD Securities would likes to highlight again that Clause 132 of the Income Tax Ordinance 2001 and subsequent amendments through Finance Act 2006 and 2007 state that profits derived from IPPs shall be exempt from and that the exemption this clause shall not apply to oil fired power plants set up between 22nd Oct’02 and 30th Jun’06, leaving HUBC exempt from the regime (For details, refer to AKD Securities’ daily dated Oct 11’12). At current levels, AKD Securities maintains AKD Securities’ ‘Accumulate’ stance on HUBC with a target price of PKR 57.4 per share.