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Corporate results season to kick off on Monday (Daily DAWN)


KARACHI, Jan 21: The corporate results season for this winter would kick off on Monday with Pakistan Petroleum Limited (PPL) unveiling its financial figures for the first half of the current financial year.
It would be closely followed by Fauji Fertilizer Bin Qasim (FFBL)–’chota Fauji’ in market parlance, which would declare numbers on Tuesday. Analysts as usual are taking aim at what they think would be the bull’s eye.
PPL: Analysts at Arif Habib Research said they expected PPL profit-after-tax (PAT) to increase by 11 per cent QoQ to Rs8,655 million, representing earning per share (EPS) at Rs7.24 in 2QFY11. “This would take 1HFY11 earnings to Rs16,445m (EPS: Rs13.76), showing a phenomenal growth year-on-year (YoY) from Rs9,754 million (EPS: Rs8.16) in the corresponding period of the previous year.
Spike in earnings was expected to be mainly driven by increase in oil and gas production by 75 per cent YoY and 11 per cent YoY, respectively, coupled with oil prices surging by 9 per cent YoY.
Analysts forecast the board to declare a cash dividend at Rs5 per share. Azfer Naseem at Elixir Securities observed that he expected the company to post EPS of Rs7.03 for 2QFY11, up 76 per cent YoY, taking 1HFY11 EPS to Rs13.55 (up 66 per cent YoY). Elixir looked forward to dividend per share at Rs5.
Analyst Ayub Ansari at Invest & Finance forecasts PAT to grow by 70 per cent to Rs16.6bn (EPS: Rs13.87), augmented by higher hydrocarbon production as well as higher realised prices as production and realised prices were visualised to increase by 7.4 per cent and 31 per cent Y/Y, respectively, in 1HFY11.
But it was the surge in oil production (+75 per cent Y/Y) coupled with higher oil prices (+18 per cent Y/Y) that was thought to be the real earnings driver for 1HFY11.
Taurus Securities forwarded note with 2QFY11 PAT at Rs8.63bn (EPS: Rs7.22), a surge of 80.5 per cent from Rs4.78bn (EPS: Rs4) in 2QFY10. Given their 2QFY11 estimate, the 1HFY11 PAT was projected to be Rs16.42bn (EPS: Rs13.74), a jump of 68.3 per cent YoY.
The major driver for the growth in the bottom line was stated to be the rise in revenues due to higher prices for both crude oil and natural gas coupled with expected increase in both natural gas and crude oil/NGL production.
Fauji Fertilizer Bin Qasim (FFBL): Almost every analyst was bullish on company’s earnings for the full year ended Dec 31, 2010 to be announced on Tuesday. Farhan Bashir Khan at InvestCap observed that he expected FFBL to post profit-after-tax (PAT) at Rs6,105m (EPS: Rs6.54) during CY10, which would be a massive increase of 61 per cent YoY.
He said that the surge was expected to accrue mainly on account of substantial improvement in company’s core profitability as well as recovery in DAP off-take.
While urea was turning out to be a tricky business for the company, with gas curtailment adding woes, lucrative DAP market (both in terms of margins and off-take) was visualised to be the primary reliever for the company.
Ayub Ansari at Invest & Finance said that CY10 was expected to be a stellar year for FFBL where the company’s net profitability was forecast to jump by 61 per cent Y/Y to Rs6.1bn.
”As has been observed in the past, the 4Q is always a bumper quarter for the FFBL following a 103 per cent Q/Q hike in DAP sales and we expect earnings to spike by 162 per cent Q/Q in 4Q10 to Rs3.2bn”, the analyst reckoned. Additionally, FFBL board was expected to announce a final cash dividend at Rs3.25 per share with the upcoming results so as to take the total payout to Rs6.30 per share for CY10.
Sarfraz Abbasi, analyst at Atlas Capital, wrote in a report that FFBL was likely to post PAT at Rs6.11bn for CY10 translating into an EPS of Rs6.54, representing substantial rise of 61.37 per cent over the corresponding period of previous year. The board was thought to announce a final cash dividend of Rs3.45 (full year dividend at Rs6.50). AHL Research projected FFBL to record a ‘staggering’ rise of 58 per cent YoY in net earnings to Rs5,976m (EPS: Rs6.40). This was mainly on account of phenomenal increase of 31 per cent YoY in average DAP prices to Rs2,633 per bag.
”We anticipate the company to declare a final cash dividend at Rs3 per share in 4QCY10, taking full year dividend payout to 6 per share”, analysts said.

Daily Dawn, Published on January 22, 2011

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