Updated Oct 02, 2004


In all fairness the week was dominated by the massive trading in PTCL and oil & gas related companies. Buying was also evident in selected cement companies. The activity in PTCL was initially driven by expectation of high dividend payout and was later followed up by a historic high dividend announcement. SSGC's profit was termed below expectation. PPL, OGDC, NBP, D. G. Khan Cement and Lucky Cement emerged as volume leaders for the full week.





According to An AKD report, "PTCL results have definitely changed the overall sentiments of the market. However, the stock on stand-alone cannot continue to drive the market for long. Going forward we foresee oil stocks to take the mental, as international oil prices have recommenced their upward drive, breaking the US$ 50 per barrel mark. We maintain out earlier stance that exploration and production companies will be the primary beneficiaries followed by oil marketing companies. On the flip side, oil consuming sectors like airlines, PSF and cement will have negative implications on their bottom line, as they will have problems in passing on the additional cost to final consumers."


While PTCL posted an outstanding profit after tax growth, the more surprising was the announcement of five rupees per share dividend. The telecom giant registered an Rs 5.72 EPS for the year ended June 30, 2004 as compared to Rs 5.43 for the previous year. However, it is worth mentioning that the additional boost to profit after tax came due to lower provisioning against tax, which added about 986 million to its bottom line. PTCL's top line grew by over ten percent to Rs 74 billion and operating margins improved by 434bps to 57%.


The decision of Oil & Gas Regulatory Authority (ORGA), not to accommodate SSGC's ongoing expansion has dented this year's bottom line severely. The primary rationale given by the regulator was that most of the projects are ongoing and will only be accommodated once they are complete. Hence, the additional revenue generated becomes part of gas development surcharge, an expense for the company and revenue for the government. The company managed to post 997 million rupees profit after tax for the year ended June 30, 2004. However, it was also much below market expectations. Analysts' least forecast was for 1.44 billion rupees. The primary hit can be attributed to gas development surcharge. The company paid 2.55 billion rupees to the government. Despite lower earnings, the company announced 15% final dividend.


The company has posted about 287 million rupee profit after tax for the year ended June 30, 2004 as compared to 175 million rupee for last year. EPS improved from Rs 14.31 to Rs 23.46. The Board of Directors have also approved distribution of 10 rupee per share final dividend. Shareholders were paid 7 rupees per share dividend last year. The improvement in bottom line can be attributed to growth in sales, going up from 2,734 million rupees to 3,348 million rupees. Cost of goods sold also went up from Rs 1,977 million to Rs 2,386 million.




The company has posted Rs 236 million profit after tax for the year ended June 30, 2004 as compared to Rs 197 million profit for last year. However, the Board of Directors decided not to distribute any dividend among the shareholders. The company had paid 20% dividend last year. At the best company's performance could be termed 'as usual'. However, its operating expenses went up from Rs185 million to Rs 228 million. Sales grew from Rs 2,239 million to Rs 2,803 million. As against sales cost of goods sold also went up from Rs 1,709 million to Rs 2,176 million.


The Board of Directors of the bank have decided issue of about 91 million Right Shares to its existing shareholders in the proportion of 82 ordinary shares for every 100 shares at a premium of five rupees. The purpose of this issue is: 1) to meet the enhanced paid-up capital requirement, 2) to fund bank's expansion plan and 3) upgrade its technology base.


The State Bank of Pakistan has approved the Scheme of Arrangement for the amalgamation of Trust Commercial Bank with and into Crescent Commercial Bank (CresBank). The Board of Directors of CreBank has also approved 21st October 2004 as effective date of amalgamation.


The Modaraba has posted Rs 25.4 million profit after tax for the year ended June 30, 2004 as compared to Rs 20.5 million for last year. However, a closer look at the details indicates that there was decline in income and higher profit was the result of reversal of provision against doubtful debts. The reversal amounted to over eight million rupees. However, a positive development was reduction in financial charges from slightly more than 12 million rupees to less than two thousand rupees.