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Morning Call about Results Previews – Arif Habib Limited

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by February 19, 2013 Brokerage

Karachi, February 19, 2013 (PPI-OT):  KAPCO and OGDC result previews 1HFY13

KAPCO; earnings expected to remain flat QoQ

Kot Addu Power Company’s (KAPCO) Board of Directors is scheduled to meet on 20th February 2013, to approve and announce its 1HFY13 financial results.

According to Arif Habib Limited previews the company to register QoQ flattish (+3%) bottom line of PKR 1,802mn (EPS: PKR 2.05) against PKR 1,754mn (EPS: PKR 1.99) in 1QFY13. The sales figure is anticipated to decline by 31% QoQ owing to 29 pps lower plant utilization of 33% compared with 62% in 1QFY13. Other operating income is also expected to shrink 28% QoQ on the back of PKR 17bn recovery from overdue receivables in previous quarter. Similarly, finance cost is expected to ease off by 36% QoQ, as Term Finance Certificate (TFC) issued in Sep-12 restricted amount owed to PSO at PKR 9,250mn. Along with the result, Arif Habib Limited expects the board to declare an interim cash dividend of PKR 3.50-3.75, consistent with company’s healthy payout policy.

Financial Highlights
PKR mn2QFY13E1QFY13AQoQ1HFY13E1HFY12AYoY
Sales

20,334

29,430

-31%

49,765

46,420

7%

Gross Profit

2,958

3,175

-7%

6,133

5,212

18%

Other Operating Income

1,283

1,792

-28%

3,075

4,395

-30%

Profit from Operations

4,114

4,857

-15%

8,971

9,405

-5%

Finance Cost

1,452

2,266

-36%

3,718

5,609

-34%

Profit after taxation

1,802

1,754

3%

3,556

2,703

32%

Earning per share (PKR)

2.05

1.99

4.04

3.07

Dividend per share (PKR)

3.50

3.50

3.75

Sources; Company financials and Arif Habib Research

OGDC; Strong production growth and interest income to yield 32% YoY

growth

Oil and Gas Development Company Limited (OGDC) is scheduled to announce its 1HFY13 financial results on February 20, 2013. Arif Habib Limited expects the company to post profit after tax (PAT) of PKR 29.1bn (EPS: PKR 6.75) in 2QFY13, a 13% QoQ growth, which is estimated to take 1HFY13 earnings to PKR 54.7bn (EPS: PKR 12.71) compared to PKR 41.6bn (EPS: PKR 9.67) in the same period last year, projecting a massive 32% YoY jump. This is expected on account of a 25% YoY jump in top line, mainly stemming from a 11% YoY increase in oil production, which will further be supported by a 9% YoY PKR depreciation against the greenback. In addition to this, a 59% YoY increase in other income, mainly fue led by the interest income on TFC issued in 1QFY13, is expected to boost the bottom line further. Arif Habib Limited expects the board to announce a cash dividend in the range of PKR 2-2.25/share along with the result.

Financial Highlights

PKR mn2QFY131QFY13QoQ1HFY131HFY12YoY
Net Sales56,85953,7956%110,65488,68025%
Gross Profit40,80938,2267%79,03562,12627%
Other Income4,7382,60582%7,3434,62259%
Exploration & Prosp Exp1,1981,461-18%2,6601,78149%
PBT41,13936,41413%77,55360,02629%
PAT29,01425,65613%54,67041,57332%
EPS (PKR)6.755.9713%12.719.6732%
DPS (PKR)2.001.753.753.25  
Sources: Arif Habib Research and Company Accounts

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