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AKD Quotidian about — FATIMA 9MCY12 Result Preview

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by October 15, 2012 Brokerage

Karachi, October 15, 2012 (PPI-OT): PTC will be announcing its 1QFY13 results on Oct 17’12. AKD Securities forecasts the company’s consolidated NPAT at PKR 2.5 billion (EPS: PKR 0.49), up 12%YoY, while on a sequential basis earnings are estimated to fall by 44% on normalization of tax rate.

According to AKD Securities, on a standalone basis, AKD Securities expects PTC to post earnings of PKR 1.4 billion (EPS: PKR 0.28), up slightly by 1%YoY but down sequentially by 53%, with sequential earnings decline largely due to absence of Ufone dividend. Key risk to AKD Securities’ earnings estimate could be the booking of VSS expense, where if PTC decides to book the entire amount (~PKR 10 billion, EPS impact of PKR 1.27), earnings could go into the red for 1QFY13. Going forward, AKD Securities expects the company to record robust revenue growth on higher international call termination rates (ICH), where impact will be visible from 2QFY13 onwards. At current levels AKD Securities recommends Buy on PTCL which is trading at FY13F P/E and P/B of 5.3x and 0.8x respectively and offers 78% upside to AKD Securities’ target price of PKR 35/share.

EFOODS 9MCY12 Result Preview
EFOODS will announce its 9MCY12 result on Oct 18’12. AKD Securities expects 9MCY12 NPAT to stand at PKR 1.6 billion (EPS: PKR 2.18), up 4xYoY on robust revenue growth (+41%YoY) and improving margins (GMs up 328bp YoY to 25%). For 3QCY12, AKD Securities forecasts EFOODS earnings to grow by 19%QoQto PKR 631 million (EPS: PKR 0.83) with earnings growth supported by higher revenues (+9%QoQ) and slight Improvement in margins (GM5 up 50bp QoQ). Higher product offtake (Ramzan effect) coupled with increase in product prices would drive revenue growth in 3QCY12, however margin accretion will be held back by losses from the Ice Cream division. At current levels AKD Securities has a Accumulate stance on EFOODS which provides limited upside to AKD Securities’ target price of PKR 78/share.

FATIMA 9MCY12 Result Preview
FATIMA is scheduled to announce its 9MCY12 result on Oct 17’12 where AKD Securities expects NPAT of PKR 3.5 billion (EPS: PKR 1.66), up 1.66%YoY. On a sequential basis, 3QCY12 bottomline is expected to drop by 58%QoQ to 896 million (EPS: PKR 0.43), primarily due to dip in fertilizer offtake as sluggish fertilizer application and anticipation of cut in imported urea price kept dealers sidelined in the period under review. In this regard, AKD Securities expects urea and CAN offtake to come off by 71%QoQ and 56%QoQ; however, NP demand is forecast to remain firm as pre-Rabi season buying on price cut resulted in healthy offtake. Bottom-line is expected to get a boost from lower financial charges due to: i) hefty debt repayment of PKR 4 billion ii) rescheduled mark up (off 2.25%) on the PKR 6 billion loan and iii) cut in DR by 150bps on Aug 10’12. Although FATIMA has underperformed index by 19%FY13TD as lower fertilizer demand (weak farmer purchasing power) and glut of cheap imported urea kept price performance under check, current valuations are attractive with CY13F P/E of 5.5x and dividend yield of 16% where AKD Securities’ TP of PKR 36/share implies a significant upside of 53%. Buy!

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