Corporate earnings : Good day for majority of companies

Oil, cotton, petro-products, and consumer products companies post higher profits.

Faseeh Mangi April 28, 2011

KARACHI: Pakistan State Oil profits up 22%

Pakistan State Oil (PSO) announced lower-than-expected results for the first nine months of fiscal 2011, as its net profit increased 22 per cent.

Net profit of the largest oil marketing company stood at Rs9.26 billion during the first three quarters of fiscal 2011 compared with the preceding year’s Rs7.53 billion, according to a notice sent to the Karachi Stock Exchange. The profit was seven per cent below market expectation, as analysts had expected the bottom-line to be around Rs9.9 billion.

The company’s board in its meeting on Thursday also declared a second interim cash dividend of Rs3 for every Rs10 share.

Sales revenue registered a growth of 5.6 per cent to Rs663 billion in the period under review against Rs627 billion in the corresponding period last year.

The country’s overall fuel consumption during the period declined by 1.7 per cent, but PSO maintained its position as a market leader with its overall share standing at 65.4 per cent.

The board showed concern over the spiralling circular debt as the company’s receivables stood at Rs157 billion in March. It observed that the financial costs associated with servicing this debt coupled with consistent non-payment from the power sector continued to hurt the overall profitability of the company.

Unilever Foods profit surges 48%

Net profit of Unilever Pakistan Foods increased by 48 per cent on the back of growth in sales during January to March 2011.

Net profit of the company increased to Rs145 million during the first quarter of 2011 from last year’s Rs98 million, according to a notice sent to the Karachi Stock Exchange on Thursday.

Rafhan Best Foods Limited was renamed as Unilever Pakistan Foods Limited in 2007. Brands of the company include Knorr, Energile and Rafhan.

Net sales rose 19 per cent to Rs1.13 billion in the first three months of the year against Rs949 million posted in the same period last year.

The company’s scrip rose 4.5 per cent or Rs58.39 to close at Rs1,359.37 during trade at the Karachi Stock Exchange.

The company kept a lid on its operating expense as it only rose 15 per cent to Rs244 million, much lower than the growth in revenue and net profit.

Unilever, the parent company, announced last week an increase of 54 per cent in net profit to Rs889 million during the period under review.

Nishat Mills profits almost double

Higher prices of cotton yarn and better revised export contracts drove up Nishat Mills’ net profit 92 per cent, analysts said.

Net profit of the textile company surged to Rs3.48 billion in the first nine months of fiscal 2011 against Rs1.8 billion recorded a year earlier, according to the unconsolidated statement of the company.

“The significant increase in profit is mainly on the back of rise in net sales by 57 per cent to Rs34.4 billion,” according to an InvestCap research note.

The net profit was also boosted by exchange gains due to 2.4 per cent depreciation in the US dollar against the rupee.

Other income surged 201 per cent due to dividend income from MCB Bank, Lalpir and Pakgen Power, the note added. MCB Bank constitutes 60 per cent of Nishat Mill’s total other income.

Nishat Mills benefitted from improved profitability from the spinning segment, consisting of cotton yarn, which contributes about 40 per cent to total sales.

However, financial charges increased 49 per cent to Rs1.1 billion as the company borrowed funds for working capital requirement.

ICI Pakistan profits jump 57%

ICI Pakistan’s net profit surged 57 per cent to Rs624 million during January to March 2011 as prices of products made by the company jumped.

The maker of paints, chemicals and soda ash among other products benefited from better margins, analysts said.

An increasing trend in petrochemical prices including that of its raw materials and a strong demand from the downstream sector led to an increase in polyester staple fibre (PSF) prices, according to BMA Capital. PSF prices increased to Rs200 per kg in February and averaged at Rs197 per kg during the quarter compared to an average of Rs132 per kg in the same period last year.

Furthermore, primary margins on petrochemicals also rose a commendable 55 per cent to $599 per ton during the first quarter of 2011 compared with $382 per ton in the same period last year.

Revenues grew by 32 per cent to Rs10.7 billion in the first quarter primarily on the back of higher prices of PSF and soda ash.

ICI enjoys consistent demand for soda ash domestically as well as the product being exported. Prices of both soda ash and caustic soda have shown an increase of 27 per cent, benefiting the company.

Published in The Express Tribune, April 29th, 2011.


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