October 25, 2020 (MLN): The highlight of the departed week was the FATF’s decision to retain Pakistan in its Grey list till February 2020 to give it a time to repair the shortcomings as Pakistan has made progress across all action plan items and has now “largely addressed”21 of the 27 action items.
Apart from this, the other important economic and business events that took place during the last week are in order so as to become acquainted with the recent developments in Pakistan’s economic and public policy.
Events of Importance through the Week:
The World Bank on Friday approved $304 million in financing for Punjab Resource Improvement and Digital Effectiveness Program (PRIDE). The program supports efficiencies in public resource management that generate savings and create fiscal space for growth-generating investments in the Punjab province.
On Thursday, Adviser on Finance Dr. Abdul Hafeez Shaikh said that despite fiscal constraints, after the pandemic, the government has devised a strategy to provide relief to people and businesses by direct cash transfers.
Besides, the International Labour Organization (ILO) in its new research report said that the coronavirus crisis hit the garment sector in the Asia-Pacific region hard, with plummeting retail sales in key export markets affecting workers and enterprises throughout supply chains.
On Wednesday, the Economic Coordination Committee (ECC) of the Cabinet decided to continue supply of RLNG to Agritech and Fatima Fertilizer till November.
Furthermore, Novartis, a Swiss MNC with a multi-decade presence in Pakistan, acquired a manufacturing facility to produce medicines locally. Novartis has an expansion plan that will bring an investment of about USD 20 million.
On Monday, ECC formed committee to evaluate the proposal for increase in Minimum Support Price of wheat.
Announcements
On the equity front, Avanceon Automation and Control W.L.L., a subsidiary of Avanceon Limited in Qatar, via notification to exchange informed that it has been contracted to provide an Intelligent Transport System for the Public Works Authority Ashghal in Lusail City.
Mari Petroleum approved submission of EOI to acquire majority shares in Two Wind Power Projects.
TPL Insurance approved an equity investment of up to 19.9% by Deutsche Investitions – und Entwicklungsgesellschaft mbH (DEG), a wholly owned subsidiary of KfW Group based in Cologne, Germany.
The general public subscription of Agha Steel Industries Limited’s 30 million shares i.e. 25% of the total offer size oversubscribed by 1.28x or by 8,322,500 ordinary shares amounting to PKR 266,320,000.
Treet Corporation Ltd decided to exit the education sector, in this regard, the Company has signed a Memorandum of Understanding (MOU) with an interested party on October 20, 2020 for, inter alia, sale of 100 % shares of its subsidiary Global Arts Limited and transfer of control thereof.
The Board of Directors of Meezan Bank Limited approved to initiate “Meezan Bank Employees Share Option Scheme” for employees of the Bank, subject to all regulatory approvals including Securities and Exchange Commission of Pakistan, shareholders' approval through special resolution etc.
The Board of Directors of the Sitara Chemical Industries Limited, in its meeting held on October 20, 2020, approved the expansion of its existing Coal-Fired Power Plant by a further 40MW to meet its existing and future requirements.
Hascol Petroleum Limited (HASCOL) decided to challenge the Order passed by the Oil and Gas Regulatory Authority (OGRA) in respect of suspension of the marketing license of the Company for Khyber Pakhtunkhwa with immediate effect and imposition of penalty of Rs. 10 million.
Hub Power Company Limited (HUBCO) clarified that the decision to issue Sukuks worth PKR 6 billion is in the discussions stage with no agreement executed as yet.
Topline Securities submitted PAI on client’s behalf to acquire more than 51% of issued and paid up capital of Mian Textile Ltd.
Financial Results:
Apart from this, several listed companies announced their financial results last week amid ongoing earnings season. Some of the important ones are as follows:
Aisha Steel Mills posted net profits of Rs 660 mln in 1QFY21, against the net loss of Rs 203.9 million incurred in the same quarter last year.
Attock Cement enjoyed a growth of 64% YoY in earnings during 1QFY21.
Bank Alfalah registered 9% YoY fall in profits during 9MCY20 to Rs 8.66 billion (EPS: Rs 4.87).
Pakistan Oilfields Limited profitability declined merely by 4.7% YoY during 1QFY21 to Rs 3.7 billion.
Packages Ltd witnessed a 29% fall in earnings during 9MCY20 to Rs. 1 billion (EPS: 11.27).
Attock Petroleum Limited witnessed a 21% YoY increase in net profits for 1QFY21 ended on September 30th, 2020, to Rs 1.485 billion against the net profits of Rs 1.225 billion reported in the same period last year.
Attock Refinery suffered loss of Rs 555 million from refinery operations during 1QFY21.
Fauji Foods incurred losses of PKR 2.4 billion in 9MCY20 i.e. around 27% lower than the losses witnessed in the same period of last year.
LOTCHEM’s profitability nosedived by 78% YoY during 9MCY20 to Rs 1.037 billion (EPS: Rs 0.69).
National Refinery Limited continued to suffer financial losses owing to lower revenue as it incurred losses of Rs. 1.31 billion (LPS: 16.4) during the quarter ended September 30, 2020, i.e. nearly 93% higher as compared to the losses made in the same period of last year.
International Steel Ltd’s profits grew by 61% YoY in 1QFY21 to Rs 559 million (EPS: Rs 1.29) against net profits of Rs 347 million (EPS: Rs 0.80) of the same period last year.
Mari Petroleum recorded a growth of 21% YoY in earnings during 1QFY21 to Rs. 9.06 billion (EPS: 67.96).
EPQL’s profitability remained lower owing to completion of debt servicing period as it posted 22.2% YoY decline in net profits during 9MCY20 to Rs 2 million from Rs 2.6 million in 9MCY19.
DGKC reported a massive 80% decline in net losses to Rs 293 million (LPS: Rs 0.67) in 1QFY21.
Nishat Power’s revenue plummeted by 17% owing to lower furnace oil prices.
PPL’s profitability stayed flat at Rs 14.32 billion during 1QFY21.
Habib Metro Bank saw a 65% rise in earnings owing to higher NII with EPS stood at Rs. 7.94.
International Industries Ltd successfully converted losses into earnings during 1QFY21 by reporting profits of Rs. 612.4 million (2.8) during the period, as compared to the losses of Rs. 56.6 million (LPS: 1.87).
Maple Leaf Cement Factory (MLCF) posted net profits of Rs 555 million for 1QFY21 against the net loss of Rs 982.3 million reported in the same quarter last year.
Engro Fertilizers Limited (EFERT) reported 9% YoY increase in net profits to Rs 11.49 billion for the nine months period ended on September 2020, compared to the profits of Rs 10.5 billion earned in the corresponding period last year.
Bank Al Habib Limited (BAHL) reported earnings of Rs. 13.2 billion (EPS: 11.91) for the nine months ended September 30, 2020, i.e. around 89% higher than the figures recorded in the same period last year.
Allied Bank Limited (ABL)’s net income for the nine months period ended on September 2020 clocked in at Rs 12.6 billion compared to the earnings of Rs 9.6 billion reported in the corresponding period last year.
Askari Bank’s profits rose by 87% in 9MCY20 despite higher taxes and provisions.
EFU General Insurance Limited (EFUG) has posted its profit after tax of Rs 2.22 billion (EPS: Rs 8.16) for the nine months ended September 30, 2020, showing a robust growth of 78.5% YoY.
Faysal Bank reported 25% YoY growth in profitability owing to higher NII and capital gains.
Engro Corporation Limited (ENGRO) posted consolidated net profits of Rs 31 million for the period of 9MCY20 which was 43% higher than the profits of Rs 21.7 million reported in the corresponding period last year.
Cherat Cement witnessed turnround in bottom-line from net loss of Rs 338.5 million in 1QFY20 to net profits of Rs 309 million in 1QFY21.
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