According to the data released by Pakistan Automotive Manufacturers Association performance of auto sector remained positive during 7MFY14. Total units sold including Cars, Jeeps and LCVs grew by 7%YoY to 75,162 as compared to 70,351 sold during the same period last year. This growth can be attributed to low base effect following the downward revision in the age limit of imported cars during December’12. However, the low base effect is expected to ease-off in the coming months. Analysis of the data revealed that LCV and pickup segment grew by colossal 26%YoY to 10,328 units as compared to 8,193 units during the corresponding period last year.
Substantial increase in the sale of Suzuki Ravi with a growth of 25% YoY to 6,840 units and temporary resumption in production of Dewan’s Shehzor, selling 501 units were the major contributors to the growth. In Cars segment, a similar trend was observed as sales stepped up by minimal 4%YoY to 64,834 units during seven months. On monthly basis, auto sales in January’14 jumped by 57%MoM to 13,910 units. Almost all local auto assemblers posted improvement in sales owing to seasonal impact as most of the buyers deferred their purchasing decisions to New Year.
It was clarified that TCP will import fertilizer but fertilizer companies will handle sales and distribution function to improve transparency in the supply of imported fertilizer. Ratification on long term allocation of gas contract is still pending. Temporary diversion of supply of gas from Guddu power may continue until it resumes electricity generation, which may last till 2QCY14. Concessionary gas price issue is still pending with ECC regarding its execution. It is important to note that ECC approved US$0.70/mmbtu gas price for EFERT's Enven plant along with clarification that gas will be supplied from Mari. However, it will take some time to execute the contract due to legal formalities and other issues related to Mari gas.
Engro Fertilizer (EFERT) has posted profit after tax of Rs5.5 billion (EPS: Rs4.24) for CY13 as against net loss of Rs2.9 billion (LPS: Rs2.26) for CY12. Plant capacity utilization at 80% for 2HCY13 paved the way for improvement in production and offtake on the back of gas supply from Mari network and 60mmcfd additional gas supply from Guddu. Net sales for CY13 showed an impressive growth of 64% YoY on account of significant uptick in fertilizer sales. As a result urea offtake of the company went up by 66% YoY during CY13 and NP sale improved by a mammoth 140% YoY pushing to gross margin to 44% for CY13 from 32% for CY 12. Financial charges inched down by 3%YoY on the back of Rs5.6 billion worth loan repayments during CY13. Analysts expect the company to perform well during 1HCY14 conditional to provision of gas from Guddu. Supply of gas from Mari at concessionary rate and long term gas contract from other fields such as KPD, Reti Maru will set future direction of company's performance.
Engro Corporation announced CY13 results on Friday, posting profit after tax of Rs8.2 billion (EPS: Rs16.01), six times higher on year-on-year basis as against the profit of Rs1.3 billion (EPS: Rs2.61) for CY12 but slightly below expectations. Engro Corporation has also announced a specie dividend in the ratio of 1:10 (one share of Engro Fertilizer for every 10 shares held by Engro Corporation). It is estimated the specie dividend will increase EFERT free-float by four percent from the current 10 per cent to 14 per cent. The major driver of Engro Corporation’s profitability for CY13 has been the turnaround in profitability of Engro Fertilizer, where the business reported earnings of Rs5.5 billion for CY13 as compared to a loss of Rs2.9 billion for the same period a year ago. Engro Foods posted dismal earnings of Rs870 million, down by 66 percent YoY.
Among other announced results of Engro subsidiaries, Engro Polymer reported a profit of Rs717 million that translates in a per share profit of Rs0.08 for Engro Corporation.
Nishat Mills Limited (NML) announced 1HFY14 results on Friday, posting an earnings growth of 35 percent on YoY basis to Rs3.9 billion (EPS: Rs10.96). In the second quarter of FY14, the company registered EPS of Rs6.29, up by 45 percent on year-on-year basis and 27 percent on quarter-on-quarter basis, it said. NML’s sales grew by seven percent Y-o-Y to Rs28.1 billion in the first half of FY14, mainly due to the rupee depreciation against the dollar, leading to higher gross margins of 18.6 percent as compared to 16.7 percent in the corresponding period last fiscal year, it said. Along with the results, the company also announced that it will establish a new wholly-owned subsidiary, Nishat Spinning (Pvt) Limited, with an authorized capital of Rs10 million divided into one million ordinary shares.
LOTCHEM has announced its CY13 result posting a surprise net loss after tax of Rs498 million (LPS: Rs0.33) as against estimated net loss of Rs29 million (LPS: Rs0.02). The loss was significantly higher than market expectations primarily due to incurrence of a higher tax charge. Key highlights of the result: 1) revenue increased by 8%YoY in CY13 to Rs57.0 billion largely due to rupee depreciation, 2) gross profits declined by 28%YoY to Rs149 million led by a slight YoY decline in regional PTA-Px Primary Margins (PM) as well as likely procurement of higher priced paraxylene and 3) higher tax charge at Rs198 million versus a tax rebate of Rs61 million in CY12. Going forward, analysts expect improvement in regional PTA-Px PMs. This is likely to improve profitability going forward.