Bank Alfalah’s net profit rose a staggering 76 per cent to Rs1.9 billion in the first half of 2011, beating market expectations.
Analysts, on average, missed the net profit figure by eight per cent as they were estimating the bottom line to stand around Rs1.77 billion.
The improvement in earnings primarily emanated from higher net interest income which blossomed on the back of better returns on assets while cost of deposits remained flat, said Topline Securities analyst Nauman Khan on Monday.
The company’s board of directors in a meeting held in Abu Dhabi, UAE on Sunday did not declare any dividend along with the results.
The company’s stock price surged 6.6 per cent to close at Rs10.18 at the Karachi Stock Exchange on Monday.
Despite a decline of 40% in provision against bad loans, total provisioning swelled by 73% to Rs1.66 billion during the period under review. The major increase was seen under the ‘provisions against value of investments’ category as it skyrocketed to Rs1.3 billion compared with a meagre Rs81 million in the same period last year.
The bank’s non-interest income rose 13 per cent to Rs2.75 billion during January to June 2011.
In the second quarter of 2011 alone, the company’s net profit almost doubled to Rs979 million against Rs492 million in the same period last year.
Engro Polymer and Chemicals losses drop
Engro Polymer and Chemicals Limited’s net losses dropped 57 per cent to Rs195 million in the first half of 2011 against Rs449 million posted in the same period last year.
The company incurred losses due to lower production of chemical VCM and fall in sales of another chemical poly vinyl chloride (PVC), the company said in a statement sent to the Karachi Stock Exchange on Monday. The drop in losses is less than expectation as analysts estimated the net losses, on average, to stand around Rs154 million.
Net sales rose 16 per cent to Rs7.89 billion from January to June 2011 mainly on the back of increased volume and higher production prices.Finance cost rose 17 per cent to Rs753 million during January to June 2011 against Rs645 million in the same period last year. Balance sheet showed total debt of approximately Rs12.8 billion in the first quarter of 2011.
The company has not been able to achieve stable operations for an extended period at design throughput rates, according to the statement. “Full benefits of the integrated operations will only be achieved with stable VCM operations at planned rates,” says the statement.
Published in The Express Tribune, August 9th, 2011.