Company Earnings: Most sectors on the up

A summary of corporate earnings released on Thursday.

United Bank (Up 14%)

United Bank Limited (UBL) has announced an increaseof 14 per cent in net profit for the first nine monthsof 2010, in line with market expectations.

Net profit of the bank increased to Rs7.9 billion or Rs6.46 pershare during January to September 2010 against last year’sRs6.9 billion or Rs5.67 per share, according to a notice sentto the Karachi Stock Exchange on Thursday.

The bank’s control over its loan losses was one of thetriggers for higher earnings, said JS Global Capital analystMustafa Bilwani. Loan losses decreased by 33 per cent toRs1.86 billion compared with last year’s Rs2.32 billion.Net interest income rose five per cent to Rs25.5 billion fromlast year’s Rs24.3 billion.

However, non-interest income fell 17 per cent to Rs7.1 billionon lower profits from securities and dividends. Income from securities and dividends both nosedived by 80 per cent each.

Engro Corporation (Up 53%)

Engro Corporation’s net profit jumped 53.2 per cent to Rs4.1 billion in the first nine months of 2010 on the back of higher urea production and Qadirpur power plant operations.

Revenue for the company increased by 32 per cent to Rs53 billion during January to September from last year’s Rs41 billion, according to a notice sent to the Karachi Stock Exchange on Thursday.

Dairy segment growth and energy sales were major players in the increased revenue, said the company’s board of directors in the notice.

Engro Corporation’s subsidiaries include Engro Fertiliser, Engro Vopak, Engro Polymer and Engro Foods among others. Engro Fertiliser’s net profit stood at Rs2.88 billion, the largest contributor to the corporation’s profits. Total urea market dropped 11 per cent to 4.2 million tons in the period under review. Avanceon and Polymer and Chemicals Limited are the only two segments that reported a loss during the period.

Sui Southern (Up 1605%)

Sui Southern Gas Company Limited declared a net profit of Rs1.11 billion for the quarter ended on September 30 – a massive increase when compared with the Rs65.31 million profit after tax for the same quarter last year. Basic earnings per share of Rs1.66 were also announced in a notification sent to the Karachi Stock Exchange.

Net sales rose about 21 per cent to Rs28.52 billion in the quarter, mainly on the back of a reduction in gas development surcharge which was recorded at Rs1.1 billion against the Rs4.2 billion last year.

While the company’s other operating expenses went down, other income (operating and non-operating) marked a reasonable improvement, all contributing positively to the increase in profits. Moreover, finance cost also fell almost 30 per cent to a little above Rs1 billion.

Nishat Chunian (Up 432%)

Nishat Chunian Limited’s (NCL) net profit jumped more than five times to Rs477 million during July to September on the back of increasing revenues.

The spinning segment is the predominant driver behind this impressive growth in profitability as high yarn prices both in the international and the local market helped it to cash in on extraordinary margins, analyst said.

Overall, net sales rose 33.8 per cent to Rs3.8 billion on a yearly basis against Rs2.86 billion posted in the same period last year owing to higher yarn prices and the consistent rupee depreciation against the dollar. The spinning segment on an average constitutes 55 per cent of total sales of the company.

The earnings per share shot up to Rs2.89 from the preceding year’s Rs0.72. The chairman of the Nishat group is Mian Mansha. MCB Bank, the second largest bank in terms of assets, also comes under the group.

Fauji Fertiliser (Up 6%)

Fauji Fertiliser Company Limited (FFCL) has announced a net profit of Rs7.02 billion (earnings of Rs10.35 per share) for the nine months ended on September 30, marking a year-on-year increase of about six per cent, according to an official notification sent to the Karachi Stock Exchange on Thursday.

Sales swelled by more than 10 per cent to Rs28.51 billion for the period primarily on the back of higher urea prices, according to Bilal Qamar from JS Global Capital. However, the result was below analyst expectation as many research houses had predicted a profit after tax higher than Rs7.3 billion.

FFCL financial figures for just the third quarter (July-September) of this year also failed to beat market expectations as the company declared a net profit of Rs1.92 billion (earnings of Rs2.83 per share), down more than eight per cent from last year’s figures for the same period. An interim dividend of Rs2 per share, or 20 per cent, was also announced.

Attock Cement (Down 60%)

A net profit of Rs96 million was announced by Attock Cement Limited on Thursday, recording an alarming decrease of 60 per cent against the same quarter’s figures for last year. Corresponding earnings of Rs1.12 per share were also declared in a communique sent to the KSE.

While the company’s net sales fell three per cent to Rs1.75 billion, cost of goods sold jumped about 12 per cent to more than Rs1.5 billion, negatively impacting gross profit.

“Cement dispatches were down because of the recent floods despite good prices in the market,” commented Furqan Punjani from Topline Securities. “Meanwhile, cost of goods sold went up on the back of rising coal prices,” he explained. Coal is a major input in the cement production process.

Moreover, the company’s distribution cost, recorded at Rs98.68 million for the quarter, was also up by almost 24 per cent compared with last year. Punjani attributed this to the floods as well since in the aftermath of all the destruction truckers had started charging exorbitant rates to transport goods and raw materials across the country.

Published in The Express Tribune, October 29^th,2010.