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STOCK WATCH


By SHABBIR H. KAZMI
Updated Feb 04, 2005

 

 

Cement sales during last seven months have grown by 23 percent to over 9 million tonnes as opposed to 7.349 million tonnes over the last corresponding period. According to estimates, cement sales are likely to witness an overall increase of 17 percent during the current financial year, to nearly 16 million tonnes. This includes 14.5 million tonnes of domestic sales and 1.4 million tonnes of exports. Capacity utilization level for the industry during this period was at 85 percent as compared to 74 percent during the corresponding period of last year. Northern region has been a dominant contributor to the increase in sales as the utilization levels for the North Region was higher than that of South.

According to some reports, Dawood Group has confirmed its intention to raise its shareholding in Engro Chemicals to 51 percent from the existing 42 percent stake in the company after the purchase of 19 percent shares of Engro last month. The group intends to buy the target number of shares from the market in order to takeover management control of the company.

According to the lead manager to the offer of Attock Petroleum, provisional figures show that over 200,000 applications have been received till Wednesday and the number is expected to touch 220,000 by the end of the week. Based on the provisional figure, the number comes to above 10 times of the offer. Initially balloting was scheduled to take place on February 8, 2005. However, due to difficulties faced by some banks in processing the applications, balloting could be delayed.

Reportedly, the Privatization Commission has received 12 Expression of Interest (EOIs) for the sale of 70.442mn shares (98.4%) of the company along with management control. The list includes almost all the existing fertilizer companies and some leading brokerage houses. The government is expected to realize about Rs 12 billion (based on the reference price of Rs 157 per share). Some analysts say that interested investor may submit even higher bid, as high as Rs 170 per share. In case Fauji Fertilizer Company acquires Pak Arab, it is likely to have positive impact in terms of increasing FFC's product range. This will eventually support the marketing of the existing fertilizer products.

 

 

PAKISTAN TELECOMMUNICATION COMPANY

The Privatization Commission has received 14 Expressions of Interest in response to its offer for 26 percent shares of the Pakistan Telecommunication Company with transfer of management control. The parties, which submitted the EoIs, included Emirates Telecommunications Corporation of UAE, Singapore Telecommunications, Mobile Telecommunications Company of Kuwait, MTN International of South Africa, Saudi Oger, China Mobile Communication Company, Millicom International, Saudi Telecom, Telecom Malaysia and other regional giants of the telecom sector. However, the Commission has not finalized the offer price as yet.

PAKISTAN PETROLEUM

PPL has announced its 1HFY05 results, posting after tax profits of Rs 4,056 million (EPS: Rs 5.91/share). The bottom line has shown an improvement of 47 percent over the same period last year. A 39 percent increase in net sales revenue of the company has flowed down to the bottom line. A massive increase in other income by Rs 144 million, which mainly represents interest income of the company, has also supported the growth in bottom line. The growth in the top line has mainly resulted due to a price increase as opposed to any major volumetric gains. The revised pricing agreements allow semi annual increase in wellhead prices of Sui and Kandhkot gas field up till financial year 2007.

FAUJI FERTILIZER

FFCL has announced its full year results posting after tax earnings of Rs 4,004 million (EPS: Rs 13.57) as opposed to Rs 3,145 million (EPS: Rs 10.66) for last year, an almost 27 percent YoY increase. The company also declared Rs 3.00 per share cash and 15 percent bonus dividend along with the annual results. A 30 percent cash and a 15 percent bonus dividend is something that surprised everybody. Overall, 2004 has been a year of positive surprises by the company in terms of highest dividend payout and two bonuses in a year. However, analysts advise investors not to get confused with the management objectives and re-start the old merger story between FFC and Fauji Fertilizer Bin Qasim. A 107 percent payout ratio gives clear indication about the investment plans of Fauji Foundation, which is becoming more aggressive in the upcoming privatization process. Beside this, all the group companies together have to invest Rs 2,800 million in the Moroccan joint venture in early 2005. The results came in lower than expectations, which can be attributed to higher than expected sales of imported fertilizer (DAP), which although has improved the top line, but has reduced the overall margins for the company. A 27 percent growth in the bottom line is still a healthy sign and a higher DAP sales also justify company's objective to support its urea sales.