Corporate results: HBL beats market expectation

HBL and the Attock group posted higher net profits for the first nine months of 2011.

KARACHI:

Habib Bank Limited (HBL) kicked off the result season in style on Monday by posting better than expected net profit for the first nine months of 2011.

Net profit of the second largest bank by assets jumped 28% to Rs14.4 billion during January to September 2011 compared with Rs11.3 billion in the same period last year, according to the bank’s unconsolidated results sent to the Karachi Stock Exchange.

The bank’s net profit jumped as net interest income rose by 19% to Rs70 billion in the period under review, according to analysts.

HBL’s board of directors in a meeting held on Monday also surprised everyone by announcing their first interim cash dividend of Rs3 per share for 2011. The excitement, however, was not enough to lift the stock price at the Karachi Stock Exchange as it declined Rs0.8 during the day to close at Rs116.1.

Non-interest income rose by 17% to Rs9.3 billion on expected higher fee income and income from dealing in foreign currency.

Given the rise in non-performing loans, loan losses jumped by 23% to Rs6.3 billion in the same period.

Operating expenditures also increased by 14% to Rs20.7 billion on rising inflationary pressures.

Attock Petroleum, Refinery profits soar

Two companies of the Attock Group, the only vertically integrated group in the country’s oil and gas sector, announced quarterly results on Monday with both petroleum and refinery wings witnessing better earnings this time around.

Attock Petroleum’s net profit grew by 25% to Rs1.1 billion during July to September 2011 on the back of strong volumetric growth in retail fuel segment and furnace oil business.

The company managed to record a whopping growth of 170%, 87% and 18% in volumes of high speed diesel, petrol and furnace oil, respectively.

Diesel and furnace oil volumes led the growth while a significant jump in petrol sales increased its contribution by 300 basis points to 12% of total sales.

Net sales of the company almost doubled to Rs35.9 billion in the first quarter of fiscal 2012 compared with Rs18.4 billion posted in the same period last year, according to a notice sent to the Karachi Stock Exchange.

Average Arab light crude oil prices increased by 49% on a yearly basis that also helped gross margins, said BMA Capital analyst Muhammad Ali Taufiq in a research note.

The complete impact of high sales did not trickle down to core profits due to a decline in distributor margins by around 6% to 12% on petrol, high octane blended component, kerosene and light diesel oil, adds the note. However, margins on high speed diesel increased by 3% while margins on furnace oil and asphalt rose by an average of 50% and 61%, respectively.

Other operating income, which comprises handling income and late payment charges, rose by 28% to Rs600 million.

The refinery wing of the group performed better than expected as net profit rose to Rs893 million during the first quarter of fiscal year 2012.

Net sales increased by 45% as a result of increase in average Arab light crude oil prices by 49% during the period under review.

Attock Refinery closed at its upper limit as it announced higher than expected first quarter result. The stock price rose 5% to close at Rs77.7.

Published in The Express Tribune, October 18^th, 2011.