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Elixir Securities Limited – Insight

Karachi, October 21, 2016 (PPI-OT): Earnings Preview NPL and FFBL

NPL is scheduled to announce its 1QFY17 financial result on 24th October 2016. Elixir Securities Limited expects the company to report an earnings of PKR684mn (EPS: PKR1.93) down 26%YoY. Elixir Securities Limited maintains Elixir Securities Limited’s underweight stance on the stock with rolled forward Jun-17 TP of PKR47/sh.

Fauji Fertilizer Bin Qasim Limited (FFBL) is schedule to announce its 3Q2016 financial result on 24th Oct’16. Elixir Securities Limited expects the company to post a profit of PKR520mn (EPS: PKR0.56). Elixir Securities Limited maintains Elixir Securities Limited’s hold stance on the stock with Jun-17 PT of PKR56/sh.

NPL: EPS at PKR1.93, down 26%YoY:

NPL is scheduled to announce its 1QFY17 financial result on 24th October 2016. Elixir Securities Limited expects the company’s profitability to go down by 26%YoY to PKR684mn (EPS: PKR1.93). Moreover, company is also expected to payout cash dividend of PKR1.5/sh. Decline in earnings on YoY basis is primarily attributable to 1) lower fuel savings of PKR64mn or PKR0.18/sh (↓31.8%YoY) on account of lower generation 315GWH (↓5%YoY) amidst lower oil prices of PKR33,891/ton(↓27%YoY) and 2)
Normalization of O and M savings, which are expected to clock in at PKR156mn or PKR0.66/sh (↓38%YoY). Elixir Securities Limited maintains Elixir Securities Limited’s underweight stance on the stock with rolled forward Jun-17 TP of PKR47/sh.

FFBL: EPS at PKR0.56, up 1.8xYoY:

Fauji Fertilizer Bin Qasim Limited (FFBL) is schedule to announce its 3Q2016 financial result on 24th Oct’16. Elixir Securities Limited expects the company to post a profit of PKR520mn (EPS: PKR0.56), up 1.8x% YoY during 3Q2016 on account of higher DAP and Urea offtake of 141ktons (↑88%YoY) and 155ktons (↑1.08YoY) respectively. Moreover lower phosphoric acid prices USD610/ton, down 25%/6% on YoY/QoQ basis are also expected to further bolster the bottomline. However increasing distribution cost and financial charges are expected to limit earnings accretion. Selling expense is estimated at PKR1.427bn (↑22%YoY) on account of higher dispatches while financial charges are expected to inflate to PKR640mn (↑10%YoY) on account of higher working capital requirement. Elixir Securities Limited maintains Elixir Securities Limited’s hold stance on the stock with Jun-17 PT of PKR56/sh.

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