Corporate results: Attock group posts strong results

Attock Refinery’s profit jumped 17 times to Rs2.19 billion in fiscal 2011.

September 12, 2011

Pakistan Oilfields profit surges

Net profit of Pakistan Oilfields (POL) rose 45 per cent to Rs10.82 billion on the back of higher production and higher prices for both oil and gas in financial year 2011.

The results are in line with analyst expectations as, on average, they forecast net profit to stand around Rs10.8 to Rs11.9 billion.

The third largest oil and gas explorer announced a cash dividend of Rs25 per share along with the final results, taking the full year payout to Rs35 per share from July 2010 to June 2011.

Net sales grew by 40% on a yearly basis which is likely due to 14% higher oil and 38% higher gas production, said IGI Securities senior research analyst Sana Abdullah.

However, the company’s stock price fell Rs4.36 to close at Rs361.32 at the Karachi Stock Exchange on Monday.

The market also expected a bonus to the tune of 10% to 20% which was not announced, hence the negative price performance, added Abdullah.

Oil and gas well operator MOL recently firmed up its production flow estimates for Tal block, which could lead to an additional production of 1,050 barrels of oil equivalent per day for POL. This production will lead to an earnings per share upgrade of Rs1.53 for fiscal 2012 and Rs3.37 for fiscal 2013, the analyst estimates.

In addition, a 33% decline in exploration cost to Rs1.1 billion and 31% rise in company’s other income due to higher payout of associate companies and a high interest rate environment, also supported the growth in the bottom-line, according to Topline Securities.

Refinery profit jumps 17 times

Attock Refinery’s profit jumped 17 times to Rs2.19 billion in fiscal 2011 against Rs126 million in the same period last year.

The growth primarily stems from improved and favourable pricing scenario that pulled the company’s core refinery operations into profit, said Topline Securities analyst Nauman Khan.

The refinery wing also announced an interim dividend of Rs2 per share after a lapse of three years, according to a notice sent to the Karachi Stock Exchange.

Support to the bottom-line also came from improved other operating income and dividend income which grew by 59% and 77% to stand at Rs1.6 billion and Rs1.1 billion respectively in the outgoing financial year.

NRL profit crosses Rs10b mark

National Refinery Limited’s (NRL) profit rose 45 per cent to Rs10.8 billion compared with Rs7.4 billion in the same period last year. Furthermore, the company announced a final cash payout of Rs25 per share.

The improved profitability was primarily on account of a remarkable performance of its lube oil business, complemented by a turnaround in fuel refinery business, said Khan.

NRL’s other income grew by a massive 95% to stand at Rs2.5 billion owing to strong cash position during the period under review against Rs1.3 billion in the same period last year.

Petroleum wing grows 18%

Net profit of Attock Petroleum beat market expectations as it rose 18 per cent to Rs4.26 billion due to higher volumes in fiscal 2011.

The board of directors in a meeting held on Monday at Damascus, Syria announced a final cash dividend of Rs30, taking the full year cash payout to Rs41.5 per ordinary share of Rs10, according to a notice sent to the Karachi Stock Exchange.

Analysts missed the bottom-line by 8 per cent as they expected net profit, on average, to stand around Rs3.9 billion.

The company’s stock price surged Rs12.42 to close at Rs376.94 during trade at the Karachi Stock Exchange.

High speed diesel, petrol and furnace oil witnessed stellar growth in volumes during fiscal 2011, which were up 7%, 41% and 51%, respectively. This resulted in an 11% growth in volumes during the period under review and increased APL’s market share to 8% from 7% in FY10.

Volumes for asphalt, which has historically comprised more than 50% of core profit, were down by 34%. Asphalt is estimated to have comprised 34% of core profit in financial year 2011, according to Elixir Securities research note. However, dismal asphalt sales are expected to be covered by striking furnace oil sales.

Net sales rose by 34% to Rs127 billion in the period under review against Rs94.9 billion in the same period last year.

Finance cost more than doubled to Rs683 million on account of higher interest charge on its payables.

Cement segment takes a dive

Attock Cement’s net profit dropped by 33 per cent to Rs684 million in financial year 2011, in line with the industry trend.

Rising energy costs and diminishing brand premium are the major earning draggers during the period under review, said Arif Habib analyst Syed Abid Ali.

The company’s board of directors also announced a cash dividend of Rs4 per ordinary share of Rs10 along with the result.

Net sales jumped by 11% on a yearly basis on account of an 8% improvement in the average selling price coupled with a 3% increase in total sales.

Rising electricity tariff and lowering brand premium have been acting like a double-edged sword for the company’s gross margin, which was likely around 20% in fiscal 2011 compared with 25% a year ago, said Ali.

The company does not enjoy the luxury of a captive power plant, which exposed it to the rising electricity cost, taking its toll on the production cost, added Ali.

On the other hand, refocus of Lucky Cement on the southern domestic market also affected the company, said Ali.

One of the largest cement makers DG Khan Cement last week also announced a drop in net profit by 27 per cent to Rs171 million in fiscal 2011.

Published in The Express Tribune, September 13th, 2011.


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