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Earning Review: HBL’s earnings wither by 10% in 9MFY19

October 15, 2019 (MLN): Habib Bank Limited has announced its financial results for the nine months ended on September 30, 2019, as per which, it has posted net profits of Rs. 8.8 billion (EPS: Rs. 5.89), i.e. around 10.9% lower than the same period of last year.

While the markup interest income of the bank depicted positive growth due to higher yields, the non-markup interest income slumped by 4.3% on account of losses associated with hedging instruments and sale of securities.

The operating expenses of the bank surged by 22% as a result of ongoing business transformation.

An interim Cash Dividend for the quarter ended on September 30, 2019 was also announced at Rs. 1.25 per share, i.e. 12.5%. This is in addition to the interim Cash Dividend already paid at Rs. 2.5 per share i.e. 25%.

Consolidated Profit and Loss Account for the nine months ended September 30,2019 (Rupees '000)

 

Sep-19

Sep-18

% Change

Mark-up/return/profit/interest earned

182,631,441

117,074,265

56.00%

Mark-up/return/profit/interest expensed

108,573,082

56,962,724

90.60%

Net mark-up/return/profit/interest income

74,058,359

60,111,541

23.20%

Non mark-up/interest income

   

Fee, commission and brokerage income

15,456,596

12,739,687

21.33%

Dividend income

367,646

636,969

-42.28%

Share of profits of associates and joint venture

2,212,652

2,324,938

-4.83%

Foreign Exchange Income

302,575

444,090

-31.87%

(Loss) / income from derivatives

(657,532)

(361,337)

81.97%

(Loss) / gain on securities

(2,411,531)

357,300

 

Other income

506,627

354,547

42.89%

Total non-mark-up /interest income

15,777,033

16,496,194

-4.36%

Total Income

89,835,392

76,607,735

17.27%

Non mark-up/interest expenses

   

Operating expenses

(68,969,691)

(56,266,809)

22.58%

Other charges

(404,057)

(465,994)

-13.29%

Workers' Welfare Fund

(393,094)

(330,051)

19.10%

Total non-mark-up/interest expenses

(69,766,842)

(57,062,854)

22.26%

Profit/(loss) before taxation

20,068,550

19,544,881

2.68%

Provision and write offs-net

(1,783,344)

(1,863,380)

 

Taxation

(9,460,517)

(7,771,355)

21.74%

Profit/(loss) after taxation

8,824,689

9,910,146

-10.95%

Earnings per share - basic and diluted (Rupees)

5.89

6.57

-10.35%

 

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NRL’s quarterly losses decline by 36%

October 15, 2019 (MLN): National Refinery Limited (NRL) has announced its financial earnings for the quarter ended on September 2019, wherein the company posted a significant decline in its losses to Rs 678.7 million against Rs 1 billion incurred in same period last quarter.  

This translated in to loss per share which clocked in at Rs8.49, marking a decline of 36.3% from Rs 13.33 in corresponding period last year.

The decline in losses largely came on the back of lower cost of sales along with the rise in other income by 12.63% YoY. In addition, finance cost also dropped by a substantial amount of Rs 97 million, which further helped in declining company’s net losses.

Furthermore, the company also witnessed 39%YoY decline its operating losses which provided comfort to the earnings.  

Profit and Loss Account for the quarter ended September 30th 2019 ('000 Rupees)

 

Sep-19

Sep-18

% Change

Gross sales

 52,332,426

 53,227,258

-1.68%

Trade discounts, taxes, duties, levies and price differentials

 (13,064,811)

 (11,968,195)

9.16%

Net sales

 39,267,615

 41,259,063

-4.83%

Cost of sales

 (39,455,909)

 (41,780,504)

-5.56%

Gross profit/(loss)

 (188,294)

 (521,441)

-63.89%

Distribution cost

 (196,882)

 (190,553)

3.32%

Administrative expenses

 (234,402)

 (227,412)

3.07%

Other income

 101,773

 90,359

12.63%

Other operating expenses

 (5,036)

 (4,122)

22.17%

Operating profit/(loss)

 (522,841)

 (853,169)

-38.72%

Finance cost

 (370,870)

 (467,937)

-20.74%

Profit/(loss) before taxation

 (893,711)

 (1,321,106)

-32.35%

Taxation

 214,946

 254,938

-15.69%

Profit/(loss) after taxation

 (678,765)

 (1,066,168)

-36.34%

Earnings per share - basic and diluted (rupees)

 (8.49)

 (13.33)

-36.31%

 

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MCB Bank to sell MCB Financial Services Ltd via...

October 15, 2019 (MLN): MCB Bank Limited, in a notification to PSX, has informed that it shall dispose of its wholly owned subsidiary, MCB Financial Services Limited to ISE Tower REIT Management Company Limited and its nominee, namely Infortech (Private) Limited, as a co purchaser.

The aforesaid transaction will take place through ‘Share Purchase Agreement’, dated October 15, 2019 for a total consideration of Rs. 89,459,258, the notification stated.

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SBP issues framework to strengthen AML/CFT regime and restrict...

October 15, 2019 (MLN): The State Bank of Pakistan (SBP) has prepared a comprehensive framework to strengthen trade related Anti Money Laundering/Combating Financing of Terrorism (AML/CFT) regime and restrict possible misuse of banking channel.

Accordingly, SBP has advised Authorized Dealers (ADs) to upgrade their systems and controls and bring policies and procedures in line with the requirements of the framework to ensure meticulous compliance with the provisions thereof with immediate effect.

‘The provisions of this framework are in addition to and not a replacement of already issued instructions on the subject of ML/FT risks. Therefore, the compliance of the same shall not absolve ADs from their legal and regulatory obligations under prevailing AML/CFT laws/rules and regulations or any other relevant law in force’ the notification issued by SBP said.

ADs have been also advised to educate their clients about their obligation of ensuring (a) correct declaration of particulars on the prescribed forms, (b) utilization of foreign exchange for the exact purpose for which it is acquired by them and (c) repatriation of foreign exchange that represents the full export value of goods.

‘In the event, it is found that material information required to be submitted on the prescribed forms has been omitted or suppressed, foreign exchange is misutilized by a client of an AD or export proceeds repatriated by a client does not represent the full export value of goods, SBP shall initiate penal action against such delinquent parties under relevant provisions. Further, the matter shall also be reported to relevant stakeholders for necessary action under the laws being administered by them’ the notice added.

Link to the full document

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Financial profile of Shanghai Electric Company to have positive...

October 15, 2019 (MLN): VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of AA+ to K-Electric Limited’s (KE) proposed Rs. 25 billion Sukuk.

KE’s long-term entity and Sukuk ratings have been reaffirmed at AA and AA+, respectively. The Company’s short-term ratings have been upgraded from A-1 to ‘A-1+’, given the expected improvement in working capital cycle with the expected increase in consumer end tariff and release of tariff differential claims from GoP post completion of NEPRA verification.

Rating assigned to KE’s outstanding Islamic Commercial Paper has also been upgraded to ‘A-1+’. With the notification and finalization of Multi Year Tariff, Rating Watch- Developing status assigned to the rating has been removed. Outlook on the assigned long-term ratings is ‘Stable’.

The assigned rating recognizes the strategic importance of KE, a vertically integrated power utility company. The exclusivity of distribution rights in its service area i.e. Karachi and adjoining areas of interior Sindh and Baluchistan provides protection from direct competition which is a key rating consideration. Business risk profile draws support from growing demand for electricity and continuous improvement across various operational metrics including reduction in transmission & distribution and aggregate technical and commercial losses. Overall financial profile is projected to remain adequate.

KE plans to issue a Sukuk amounting to Rs. 25 billion to finance ongoing capital and operating expenditures of the company. Tenor of the instrument is 7 years (inclusive of a grace period of 2 years). Ratings to the proposed Sukuk draw strength from the structural features of the instrument. Sizeable and growing cash flows (increased at a CAGR of 13.6% over the last 5 years) that will be routed through the new Master Collection Account is a key rating strength and provides strong coverage for debt payments planned to be undertaken through the MCA.

KE has received fresh public announcement on 30th September 2019 from Shanghai Electric Power of their intention to acquire 66.4% stake in KE. Financial profile and ownership structure of SEP along with expected synergies in various business and operational areas will have positive implications for KE.

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