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Karachi, April 17, 2013 (PPI-OT): 9MFY13 EPS at PKR42.6: Attock Petroleum Limited (APL) announced its 9MFY13 financial results yesterday.
According to Elixir Securities Limited he company posted profit of PKR2.95bn (EPS: PKR42.6), down 6% YoY. 3Q EPS clocked in at PKR11.42, down 15% YoY.
Financial Highlights No. of Shares 69mn
| PKRmn | 9MFY12A | 9MFY13A | YoY | 3QFY12A | 3QFY13A | YoY |
| Net Sales |
110,755 |
117,237 |
6% |
36,234 |
39,096 |
8% |
| Cost of Sales |
107,116 |
113,306 |
6% |
35,087 |
38,079 |
9% |
| Gross Profit |
3,639 |
3,931 |
8% |
1,146 |
1,017 |
-11% |
| Distribution cost |
608 |
1,126 |
85% |
228 |
325 |
43% |
| Finance Cost |
919 |
1,221 |
33% |
344 |
443 |
29% |
| Other Operating Exp |
327 |
309 |
-5% |
101 |
81 |
-20% |
| Other income |
2,627 |
2,896 |
10% |
897 |
925 |
3% |
| Profit before tax |
4,468 |
4,225 |
-5% |
1,382 |
1,113 |
-19% |
| Taxation |
1,320 |
1,280 |
-3% |
452 |
323 |
-29% |
| Profit after Taxation |
3,147 |
2,945 |
-6% |
930 |
790 |
-15% |
| EPS (PKR) |
45.54 |
42.60 |
-6% |
13.45 |
11.42 |
-15% |
| DPS (PKR) |
17.50 |
0.00 |
-100% |
0.00 |
0.00 |
nm |
Source: Company Accounts, Elixir Research
Inventory losses likely limited earnings: Earnings underperformed expectations primarily on account of lower gross profit which was likely due to higher costs as top line was close to Elixir Securities Limited expectations. Higher cost of sales would likely have emanated on account of inventory losses during the period. Price changes of different products during the quarter suggests that higher inventory levels of HSD would likely have resulted in steep inventory losses.
Working capital changes hurting cash flows temporarily: Product mix of APL has gradually tilted towards furnace oil sales which would likely have resulted in receivables’ increase of PKR2.6bn during 3QFY13. However, APL’s payables have also increased by PKR1.8bn which has partially offset receivables increase.
With higher increase in receivables, cash conversion cycle of APL has increased from 10 days in 2QFY13 to 12 days to 3QFY13. Change in cash cycle has led to working capital outflow of PKR1.2bn whereas repayment of ST borrowings of PKR1.7bn has further reduced cash flows. Cash balances have thus reduced by 28% QoQ to PKR87/share.
Elixir Securities Limited expects these outflows to reverse by Jun-13 and expect APL to have sufficient cash flows for payout at the time of FY13 result announcement. Earnings estimates revised down; PT maintained: Elixir Securities Limited has revised down Elixir Securities Limited full year EPS estimates for APL by 7% on the basis of 3QFY13 underperformance. APL is currently trading at FY14 PER of 6.7x and offers an upside of 24% to Elixir Securities Limited Dec-13 PT of PKR610/share.