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October 30, 2020

OGDC profit declines 14pc to Rs23.427bln in Q1

Business

October 30, 2020

KARACHI: Oil and Gas Development Company (OGDC) profit shed 14 percent to clock in at Rs23.427 billion with earnings per share (EPS) of Rs5.45 for the quarter ended September 30, 2020, a bourse filing said on Thursday.

The company booked Rs27.316 billion profit with EPS of Rs6.35 in the same quarter last fiscal. OGDC announced an interim cash dividend of 20 percent at Rs2/share in its notice to the Pakistan Stock Exchange (PSX).

“The dividend will be paid to the shareholders whose names will appear in the Register of members on December 14, 2020,” OGDC statement said. Company results were above expectations as per analysts from various brokerage houses.

Net sales of OGDC declined 10 percent to Rs59.528 billion in Q1FY21 from Rs66.203 billion in Q1FY20, mainly on account of lower oil and gas production and decline in oil prices compared to the same period last year. Operating expenses of the company shot up 16 percent to Rs17.274 billion in July-September FY21 from Rs14.885 billion in the same quarter last fiscal, whereas royalty expenses declined 13 percent to Rs6.726 billion in the quarter compared to Rs7.738 billion the same period last year. Other income of the company surged 16 percent to Rs3.294 billion in Q1 from Rs2.844 billion in the same quarter last fiscal.

Exploration expenses of OGDC dropped 25 percent to Rs2.956 billion in Q1FY21 from Rs3.961 billion in Q1FY20.

Analyst Muhammad Tayyab Kamal of Optimus Research in his note said OGDC’s bottom line was supported by lower exploration costs despite two dry wells (down 37 percent QoQ), lower operating expenses (down 14 percent QoQ), lower admin expenses (down 12 percent) QoQ), and lower financial costs (down 16 percent QoQ).

During the period under review, the company paid Rs10.593 billion on account of taxes.

FCCL profit surges 38pc in Q1

Fauji Cement Company Limited (FCCL) profit climbed up 38 percent to Rs695.584 million for the first quarter ended September 30, 2020 translating into EPS of Re0.5, a bourse filing said. The company earned Rs292.829 million profit with EPS of Re0.21, in the corresponding quarter last fiscal. It did not announce any interim cash dividend for the quarter under review, the PSX notice said. Research Analyst Hammad Hussain of Optimus research said the result was above expectation, attributable to We higher than expected gross margin. Net sales of the cement company surged 30 percent to Rs5.5 billion in Q1 compared to Rs4.243 billion in the same quarter last fiscal. This was highest since Q3FY18 and above forecast of Rs5,127 million. “We attribute the 47 percent sequential jump in sales to significant jump in retention prices. Retention prices surged by Rs54 W/W to Rs323/bag, well above our forecast of Rs301/bag,” Hussain added.

Gross margins of the company jumped 101 percent to Rs1.188 billion in Q1FY21 from Rs591.354 million in Q1FY20, this, the analyst said was as expected due to lower fuel costs and higher retention prices. “Operating leverage from 22 percent QoQ dispatch growth, ebbing fuel costs and Rs54/bag escalation in retention price are the likely factors that contributed towards margin expansion.” Income tax expenses of the company surged 139 percent to Rs260.531 million from Rs108.808 million in the same quarter last fiscal.

Optimus analyst said, “We maintain our outperform stance on FCCL with a future value of Rs24.”

Amreli Steel profit jumps 36pc

Amreli Steels Limited profit increased 36 percent to Rs110 million for the quarter ended September 30, 2020 translating into EPS of Re0.37, a bourse filing said.

It had booked a loss of Rs81 million with loss per share of Re0.27, in the corresponding quarter last year. The company did not announce any interim cash dividend, the PSX notice said. Brokerage BMA Capital in a report said, “The result was above our expectations due to higher gross margins and sales volume. Gross margins during Q1FY21 increased by 6.7ppts to 10.9 percent compared to 4.2 percent in the previous quarter.” The uptick in earnings was mainly attributed to post COVID-19 recovery in steel industry sales volume, construction package stimulus, and stable rupee/dollar exchange rate. As a result, the net sales increased by 54/30 percent QoQ/YoY to Rs7.91 billion, the brokerage house added.

Brokerage Arif Habib Limited in its report said, “The sales and distribution expense witnessed an increase of 43 percent QoQ to Rs201 million on account of significantly higher sales. Whereas, the administration costs declined by 34 percent QoQ to Rs150 million.”

Financial charges decreased by 9.0 percent QoQ to Rs456 million as a result of lower interest rate environment. The other expense head experienced a reversal, posting positive Rs11 million in the current quarter, it added.

“Going forward, we expect the company to fare better due to the recovery in the steel volumes and stable exchange rate,” the brokerage house added.

SCBPL profits drop 51pc in Q3

Standard Chartered Bank Pakistan Limited (SCBPL) profit dropped 51 percent to 2.056 billion in the third quarter of 2020, with EPS of Re0.53, a notice to the PSX said.

The bank had booked a profit of Rs4.201 with EPS of Rs1.09 in the period ended September 30, 2019. It did not announce any dividend.

Net interest income fell 8.0 percent to Rs6.636 billion in Q3 compared to Rs7.189 billion in the same quarter last year.

During the quarter, the bank’s total non-interest income fell 30 percent to Rs1.931 billion, from Rs2.755 billion in July-September 2019. It was on account of overall declines under various heads in non-interest income except other income which climbed 77 percent to Rs44.89 million, compared to Rs25.345 million in the same period last year.

The bank’s fee and commission income declined 22 percent, foreign exchange income fell 32 percent, income from derivatives went down 64 percent, whereas gain on securities dropped 39 percent.

Commenting on the results, SCBPL CEO Rehan Shaikh said, “I am pleased to announce the third quarter 2020 results. The bank has delivered a resilient financial performance.”

He said that though the external environment remained challenging, the bank expected to recover gradually from the impacts of the COVID-19 pandemic.

“Our results demonstrate our strong business fundamentals. The bank continues to invest in its digital capabilities to enhance our clients’ banking experience by offering innovative solutions,” he added.

The bank achieved another milestone as total deposits crossed Rs550 billion. With a growth of 22 percent year to date, total deposits closed at Rs570 billion, with current and saving accounts constituting 94 percent of the deposits base.

The incremental liquidity generated was currently deployed in government securities and interbank lending, thereby resulting in an increase of 17 percent in total assets, which crossed Rs700 billion milestone to close at Rs728 billion, the statement added.

Taurus Research in its notes said the bank’s current investment portfolio was distributed between T-Bills: 51 percent, and PIBs/Sukuk: 49 percent.