STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Oct 30, 2004

 

Despite announcement of good results the index movement remained full of surges. While the fertilizer companies and OGDC came out with good results, investors were a little disappointed by the results of PTCL. Banks in general remained the pick of investors. The persistent higher prices have improved the earnings of oil and gas marketing companies but it is yet to be seen when the government decides to pass the impact of higher oil prices to end consumers. There is growing consensus that the decision will come soon after Eid, though the government has been saying that there is no such proposal under consideration.

 

 

 

 

PAKISTAN INTERNATIONAL AIRLINES

Pakistan International Airlines Company announced its 3QCY04 results posting after tax losses of Rs 386 million (EPS: negative Rs 0.32) as compared to a profit of Rs 726 million (EPS: Rs 0.63) during 3QCY03. This translates into nine-month earnings of Rs 1,013 million (EPS: Rs 0.88) as compared to Rs 608 million (EPS: R0.53) during the corresponding period last year. The reason for the decline in earnings during 3QCY04 is the increase in jet fuel prices that has adversely impacted margins.

NATIONAL BANK OF PAKISTAN

The bank announced its third quarter results posting net profits of Rs 2,013 million (EPS: Rs 4.09), 47% higher YoY and 4.5% higher than market expectations. This translates into nine-month earnings of Rs. 4,202 million (EPS: Rs 8.53), 28% higher YoY. The result was broadly in line with market expectation apart from the amount of provisioning. Although analysts estimated a decline in provisioning levels compared to the previous level, the amount was much lower than the expectation depicting the adequate level of preparedness in order to meet the prudential regulations.

PAKISTAN STATE OIL COMPANY

The largest oil marketing company of Pakistan announced its first quarter results, lower than market expectations. Major reason behind the difference was lower-than-expected growth in the top-line where the furnace oil consumption estimates might be higher than the actual.

ICI PAKISTAN

The company announced its third quarter results on Friday posting net profits of Rs 2,104 million (EPS: Rs 15.14), inclusive of a one time gain on the divestment of its Pakistan PTA stake of Rs 1,789 million (EPS: Rs 12.89). This result was 2.7% higher than market expectation mainly due to a) higher core earnings than expected and b) lower gain on sale of its Pakistan PTA stake.

CHAKWAL CEMENT

Orascom signed an agreement with Chakwal Group of Industries for the purchase of 51% stake in Chakwal Cement. Reportedly, Orascom would invest US$ 100 million in the project. The project is expected to start commercial production in the next 8 months with a production capacity of 8000 tons per day, which would make it the country's largest cement plant. Chakwal Cement was originally envisaged to commence commercial production by October 1997 but the project could not be completed on time due to financial constraints and the long delay in the clearance of certain parts of the imported plant from the Karachi Port.

INDUS MOTORS

In line with the continued strong growth in car sales, Indus Motors reported 19% YoY jump in revenues during first quarter to Rs 6,521 million. However, as a result of the weakening of rupee, the company saw a 24% YoY increase in cost of goods sold, which caused its gross margin to decline by 4%. The relatively slow increase in operating expenses coupled with the 27% YoY jump in other income ensured that the company's net margin fell by a relatively smaller 3%, thereby causing an 18% YoY decline in net profits to Rs 368 million (EPS: Rs 4.7/share).

 

 

FAUJI FERTILIZER

Fauji Fertilizer Company announced its third quarter results and the company booked a net profit of Rs 1,531.5 million (EPS: Rs 5.11), higher than market expectations. The company also announced a dividend of Rs 4/share taking total dividend for the year to Rs 12/share (unadjusted) and R10.6/share (adjusted). Major reasons for the variations in with expectations were (I) Higher other income, where the company booked dividend income of Rs 475 million from Fauji Jordan in this quarter, which analysts were expecting to be booked in the last quarter and (II) improving operating margins due to the rationalization of the operating cost.

OGDC

The largest oil and gas exploration and production company of Pakistan announced its first quarter profits of Rs 7,467 million (EPS: R1.74), 3% higher than expectations and announced a dividend of Rs 1.5/share for the period. While, the top-line estimates were 6.7% higher than the actual, lower than expected operational cost and significantly lower exploration cost mitigated the impact of the top-line variation. The view is that the exploration cost of the company should normalize from second quarter onwards and earning growth is likely to come from increasing international oil prices and improvement in gas production.

Company High Low Closing

 Week's Turnover

Oil&Gas Dev.XD

67.20

65.75

65.75

157,382,200

P.T.C.L.A XD

40.55

38.25

38.25

98,694,500

Fauji Fert Bin

21.05

20.35

20.65

89,107,000

National Bank

71.20

70.50

70.80

56,039,400

Fauji Fert.XB

115.75

112.00

115.70

23,421,000

P.S.O. XD

262.00

257.25

257.25

20,468,100

Sui North Gas

55.40

54.20

54.45

13,616,000

M.C.B.

50.60

48.70

48.70

13,194,400

Hub PowerXD

29.75

29.40

29.40

12,594,000

Sui South GasXD

24.80

23.05

23.05

6,220,000