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AKD Quotidian about — PSO: 9MFY12 Result Preview

Karachi: Pakistan State Oil Company is scheduled to announce its 9MFY12 result later today where AKD Securities expects NPAT of PkR7.3bn against NPAT of PkR9.26bn reported in the same period last year.

According to AKD Securities, the result translates into an EPS of PkR42.63 versus EPS of PkR53.98 in 9MFY11, a decline of 21%YoY mainly due to a larger base last year on account of PkR26bn in tax reversals. Sequentially for 3QFY12, AKD Securities expects earnings of PkR1 5.91/share (NPAT of PkR2.73bn), up 30%QoQ due to positive NRV adjustments on inventory (PkR9.22/share post tax on 50% storage utilization rate), contained currency losses (QoQ deprecation in average PkR/US$ parity of 1%) and higher deregulated product margins. AKD Securities expects earnings improvement despite a sequential decline in volumes for the review period – down 13%QoQ. PSO’s stock price has underperformed sharply over CYTD, down 14% against the broader market (absolute gain of 8.7%) with focus on continuing circular debt accretion impacting product availability and payout capacity. Current market price offers an upside of 34% to AKD Securities’ target price of PkR330/share.

LOTPTA: 1QCY12 Result Preview

LOTPTA will announce its 1QCY12 results tomorrow. AKD Securities expects the company to post a second consecutive quarterly loss with NLAT forecast to stand at PkR332mn (LPS: PkR0.22) where the company’s profitability continues to be hit by poor PTA-Px primary margins. Furthermore, demand for PTA is also likely to be tepid, particularly from the PSF sector given the cheap availability of cotton (substitute for PSF). On a sequential basis, AKD Securities expects loss to reduce by 19%QoQ due to slight improvement in GMs and lower foreign exchange translation losses. At current levels, AKD Securities still finds LOTPTA demanding, which is trading at CY12F and CY13F PER of 11.9x and 10.6x, respectively.

ABL: 1QCY12 Result Preview

Allied Bank Ltd (ABL) is scheduled to announce its 1QCY12 result tomorrow. AKD Securities expects the bank to post NPAT of PkR 2.79bn (fully-diluted EPS: PkR 3.00) in 1QCY12 vs. NPAT of PkR2.53 billion (fully-diluted EPS: PkR2.67) in 1QCY11, translating into growth into growth of 12% YoY. While NII growth is expected to be modest at 5%YoY (tighter NIMs) and loan provisions are expected to be up ~2x (ageing effect), double-digit earnings growth should be driven by higher investment income (ABL has pumped funds into ABL AMC while 21% rally in the KSE-100 in 1QCY12 could have led to booking of sizeable capital gains). This should also act to lower effective tax for ABL – expected at 28.9% in 1QCY12 vs. 34.7% in 1QCY11. ABL trades at a CY12F P/B of 1.24x and PER of 5.60x. At current levels, AKD Securities’ revised target price of PkR 69/share offers upside of 5.3% and implies an Accumulate stance.

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