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Morning Call about Result Preview 1HFY12 – Arif Habib Limited

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by January 27, 2012 Brokerage

Karachi: Lucky Cement Limited and Pakistan Oilfields Limited

Lucky Cement Limited (LUCK) is expected to announce its 1HFY12 financial result on January 30, 2012.

According to Arif Habib Limited expects the company to earn profit after tax (PAT) of PKR 3,043mn (EPS: PKR 9.41) in 1HFY12, a massive 108% YoY improvement, when compared with PKR 1,461mn (EPS: PKR 4.52) in 1HFY11. This strong growth is expected on account of a 21% YoY rise in the average retention price, which is likely to expand gross margin to 40%, highest since FY06.

The stock of LUCK has gained 15.2% since Jan-12 and Arif Habib Limited believes it has still more to offer as it is trading 38% below Arif Habib Limited’s target price at an attractive PER of 4.8x, thus Arif Habib Limited recommends buy.

Financial Highlights

PKR million  1QFY121QFY11QoQ 1HFY12  1HFY11   YoY
Net Sales  7,280 7,496  -3%14,776 12,02823%
Cost of Sales    4,341  4,581  -5% 8,922 8,06011%
Gross Profit2,939  2,915  1% 5,854 3,96848%
Distribution Costs    876  922 -5%1,798 1,816  -1%
Operating Profit 1,939  1,8734%  3,8121,994 91%
Finance Cost 7681 -6% 157  294 -47%
Profit after tax1,537 1,506 2%   3,0431,461108%
Earnings per share (PKR)4.754.66 9.41    4.52

 

POL: Earnings are expected to jump by 37% YoY

Pakistan Oilfields (POL) board meeting for 1HFY12 is scheduled for February 1, 2012 in the UAE and the result will be announced on the next day. Arif Habib Limited expects the company to post net income of PKR 7.11bn (EPS: PKR 30.09) in 1HFY12 compared to PKR 5.20bn (EPS: PKR 21.99) in the corresponding period last year. This growth in earnings primarily emanates from 37%YoY rise in crude prices, 6% higher oil production and 3% rise gas flows. During the period production from Adhi and Manzalia fields were up by 16%YoY and 7%YoY respectively however, decline in flows from Pindori and Pariwali fields mitigated this rise. In 2QFY12, POL’s net income is anticipated to register a QoQ rise of 6% to PKR 3.66bn (EPS: PKR 15.49). The company is expected to announce 1st interim dividend of PKR 13/share along-with the result. Other income in 2HFY12 is estimated to jump by 39% YoY to PKR 1.43bn as the company is likely to book dividend income to the tune of PKR 590mn from its associated companies. At yesterday’s closing price of PKR 364.33/share, POL’s share trades at FY12 P/E of 6.4x and offers a prospective dividend yield of 11%.

 

Financial Highlights (PKRmn)
  2QFY12F  1QFY12 QoQ1HFY12E1HFY11 YoY
Net Sales 7,1827,328-2.0% 14,51011,576 25.3%
Operating Costs 1,4161,347 5.2%2,763 2,730 1.2%
Exploration Costs 110 7448.3% 184300-38.7%
Financial Charges105 111-5.7% 21611883.7%
Other Income999 430132.2% 1,4301,03038.8%
Net Income3,663 3,455 6.0% 7,1185,20236.8%
EPS (PKR)15156.0% 302236.8%

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