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Shahtaj Textile’s net profits up by 21% in 1HFY20

February 25, 2020 (MLN): Shahtaj Textile Mills Limited (STJT) has announced its financial results today for the half-year ended  December 31, 2019, as per results, it has posted its earnings of Rs 63 million. I.e. 21% higher than the net profit of Rs 520 million of the corresponding period of last year.

As per the financial statement of the company, the cost of sales went up by 4.58%, but more than an increase in net sales (up by 7.59%) made the gross profits increased to Rs. 235 million, up by 45.46% YoY.

On the cost front, the distribution cost, administrative expenses jumped by 18.63% YoY and 13.11% YoY respectively whereas other operating expenses soared by 3.72 times YoY which restricted the company’s bottom line.

Moreover, an increase in finance cost by 22.6% YoY, from Rs 38 million to Rs 46 million owing to higher borrowings with higher interest rates, keeping the profitability of the company in check.

During the period under review, the other income of the company showed a massive decline of 99% YoY to stand at Rs 150 thousand.

STJT’s basic and diluted earnings per share have been reported at Rs 6.57 per share while those recorded last year were Rs 5.44 per share.

 

Profit and Loss Account for the Half Ended December 31 2019 (Rupees)  

 

Dec-19

Dec-18

% Change

Sales - net

 2,369,462,270

 2,202,338,961

7.59%

Cost of goods sold

 (2,133,858,211)

 (2,040,364,691)

4.58%

Gross profit

 235,604,059

 161,974,270

45.46%

Distribution cost

 (36,473,734)

 (30,745,300)

18.63%

Administrative expenses

 (52,684,895)

 (46,578,778)

13.11%

Other operating expenses

 (18,421,208)

 (4,948,805)

272.24%

Finance cost

 (46,730,150)

 (38,122,898)

22.58%

 

 (154,309,987)

 (120,395,781)

28.17%

Other income

 150,759

 25,194,523

-99.40%

Profit before taxation

 81,444,831

 66,773,012

21.97%

Taxation

 (18,006,333)

 (14,264,694)

26.23%

Profit after taxation

 63,438,498

 52,508,318

20.82%

Earnings per share - basic and diluted

 6.57

 5.44

20.77%

 

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Efforts afoot to start importing Euro-IV and V standard...

February 25, 2020: Cognizant of the modern time needs and environmental issues, the government has started working on a strategy to import Euro-IV and V standard fuel conforming to the latest vehicles and tackle environmental issues like smog & air pollution.

“Currently, Euro-II & III standard petrol is available in the country, while we are making efforts to start importing Euro-IV & V standard fuel in the year 2020 to meet needs of the latest vehicles and tackle environmental issues,” a senior official of the Petroleum Division informed the National Assembly Standing Committee on Energy during a recent meeting.

The official said the Sulphur content in fuel was being reduced to minimum level, besides ensuring the recommended level of manganese additive in petroleum.

She said a car manufacturing company, which had filed a complaint of the higher-than-recommended level of manganese additive in fuel, had appreciated the government for taking remedial measures and resolving the issue.

Meanwhile, a senior official privy to petroleum sector developments told APP that the government was making all-out efforts to upgrade existing oil refineries and establish new deep conversion facilities for meeting the country’s fuel requirements smoothly.

The official said an unprecedented incentive package was in place for setting up new deep conservation of oil refineries, enabling them to import machinery, vehicles, plants and equipment, and other materials.

Elaborating the government efforts to achieve self-sufficiency in the oil refining sector, he said, Byco Oil Pakistan Limited (Byco) had established an Oil Refinery at Hub, Balochistan, having the capacity to purify 120,000 Barrel Per Day (5 million tons/annum) at a cost of $ 400 million.

Byco has also installed Single Buoy Mooring (SBM) facilities for transportation of imported Crude Oil and petroleum products from ships to the storage tanks. The capacity of the said facility is 12 M. tons per annum.

Similarly, Attock Refinery Limited (ARL) has started producing Euro-II (0.05 % Sulphur HSD), besides it installed isomerization plant and enhanced the production of Motor Gasoline.

While Pakistan Refinery Limited (PRL) has installed the isomerization plant in 2016 and since then has doubled its production of Motor Gasoline.

 Whereas, Pak Arab Refinery Limited (PARCO) is implementing its Coastal Refinery project at Khalifa Point, near Hub, Balochistan, which is a state-of-the-art refinery having a capacity of 250,000 barrels per day (over 11 million tons per annum) with an estimated cost of over $ five billion.

 Besides, the official said, “Currently, around six projects, investment initiatives and proposals in the oil refining sector are in pipeline and at different stages to purify around 1.110 million Barrel per Day (BPD).”

Sharing details, he said an oil refinery and petrochemical complex of 300,000 BPD oil capacity would be set up at Gawadar, Balochistan; PARCO would install 250,000 BPD Coastal Refinery at Hub, Balochistan; SINO Infrastructure Hong Kong Oriental Times Corporation Ltd (SIOT) would establish 250,000 BPD Gwadar Refining and Industrial Park, Upcountry Deep Conversion Refinery and Crude Pipeline of 250,000-300,000 BPD oil would be set up in collaboration with Pakistan State Oil and Power China International Group, Falcon Oil Private Limited to set up 40,000 BPD oil refining facility at Dera Ismail  Khan and Khyber Pakhtunkhwa Khyber Refinery Limited would establish the facility to purify 20,000 BPD oil in Kohat.

He said the government was also planning to upgrade Pakistan Refinery Limited (PRL) with an estimated cost of $ one billion aimed at achieving self-sufficiency in the refining sector and bringing down the oil import bill.

At present, the official said, around 55 percent needs of diesel and petrol were being met through the import of petroleum products in finished form, while 40 to 45 percent of requirements were fulfilled by refining the crude oil at domestic facilities.

APP

PPL’s profits fall owing to lower production flows and...

February 25, 2020 (MLN): The Pakistan Petroleum Limited (PPL)’s net profits for the six months stumbled by 19% YoY to Rs 24.44 billion with EPS Rs 8.98 per share as compared to Rs 30.267 billion earned ion the corresponding period of last year.

The decline in the company’s profitability was mainly attributable to a fall in oil and gas production and lower oil prices.

During the period, the total gas production for the Company cut down by 10%YoY on the back of nearly lower production from Kandhkot and Tal Block. In addition, Oil production also fell by 5%YoY owing to lower production from Nashpa, Adhi and Tal block, however, the addition of Dhok Sultan in November 2019 partially offset the decline in oil production.

The revenues of the company surged by 8.32% YoY to Rs 85.6 billion. This positive price variance was mainly owing to devaluation of Pak Rupee against Green Back which was partially offset by lower Oil prices and decline in production flows during the period mentioned above.

On the other hand, the exploration expenses of the company remained elevated as it increased more than double by 74% YoY due to dry well cost incurred at Nooh Well (Hab Block). The financial charges of the company also grew by a considerable amount of Rs 260 million owing to higher interest rates on short-term borrowings.

More notably, the Other Income of the company fell significantly from Rs 6.3 billion to Rs 2.5 billion on the back of depleting cash balance amid rising circular debt.

Despite the fact that PPL is more severely affected by circular debt buildup than peers,  it has better potential to ramp up production from existing fields going forward, a report by Intermarket Securities said.

The report further underscored that GoP Sukuk issue may lead to a large inflow of cash for PPL, as this issue will likely focus on the gas/LNG chain. A greater than PKR50bn share for PPL will ease off cashflow issue materially, the report added.

Profit and Loss Account for the half-year ended December 31, 2019 ('000 Rupees)

 

Dec-19

Dec-18

% Change

Revenue from contracts with customers

 85,630,629

 79,056,837

8.32%

Operating expenses

 (21,533,587)

 (19,593,804)

9.90%

Royalties and other levies

 (12,703,060)

 (11,640,697)

9.13%

Gross profit

 51,393,982

 47,822,336

7.47%

Exploration Cost

 (14,263,219)

 (8,188,649)

74.18%

Administrative expenses

 (1,331,102)

 (1,100,708)

20.93%

Finance cost

 (540,535)

 (280,453)

92.74%

Other charges

 (5,008,753)

 (4,301,360)

16.45%

other income

 2,556,801

 6,344,601

-59.70%

Profit  before taxation

 32,807,174

 40,295,767

-18.58%

Taxation

 (8,362,644)

 (10,028,238)

-16.61%

Profit after taxation

 24,444,530

 30,267,529

-19.24%

Earning per share - basic and diluted (rupees)

 8.98

 11.12

-19.24%

 

Copyright Mettis Link News

Analyst Briefing: Engro Corp expresses skepticism over current urea...

February 25, 2020 (MLN): Engro Corporation Limited held its analyst briefing on February 24, 2020, to discuss the financial results for the year ended December 31, 2019.

To recall, the company had declared net profits of Rs. 30.2 billion (EPS: Rs. 28.69) for the year, which is nearly 28.17% higher than the figures reported last year. It also announced a Final Cash Dividend for the year at Rs. 1 per share i.e. 10%. This is in addition to Interim Dividends already paid at Rs. 23 per share i.e. 230%.

According to the details provided by BMA Research, the management stated that its earnings were lower than the industry average owing to several one-off items. These included SAP implementation costs, FCEPL’s impairment, Engro Vopak’s tax adjustment, training and development costs, implementation of IFRS 16, as well as project feasibility costs. The management stated that all these one-off items caused the company’s non-core expenses to swell substantially.

Shedding some light on its current endeavors, the management stated that the company is trying to enhance its market visibility in the telecom sector, for which it has invested nearly Rs. 7.5 billion for 1,500 telecom towers. The company informed that it plans to have at least 10,000 such towers within the next two years to achieve its desired market share of 25%.

With regards to its fertilizer business, the management raised concerns over the premium it was charging currently, as it believed that it won’t be sustainable in a competitive pricing environment. Nonetheless, it assured that the company would resolve to maintain fertilizer prices at Rs. 1,840per bag.

It also informed the onlookers that it has commenced construction on SECMC Phase 2, a project by Sindh Engro Coal Mining Company and Engro Powergen Thar. This would result in an increase in the production capacity of coal mines to 7.5mn MT.

It is pertinent to note the Engro Corporation Limited has various subsidiaries under its wing, namely Engro Chemicals and Polymers Ltd, Engro Powergen and Qadirpur Ltd, Engro Fertilizers Ltd, FrieslandCampina Engro Pakistan Ltd, and Engro Vopak Ltd.

Nearly all of the above-stated companies reported positive earnings, except for FrieslandCampna Engro Pakistan which suffered losses amounting to Rs. 1.1 million against the profits of Rs 63,783 earned last year.

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HUBC registers robust growth on CPHGC project and PKR...

February 25, 2020 (MLN): One of the largest Independent Power Producer pf Pakistan, Hub Power Company Ltd. (HUBC) has announced its financial results for the half-year ended December 31, 2020. As per results, the company has witnessed a robust growth of 102.23% in its net profits, standing at Rs 11.51 billion which translated into an EPS of Rs 8.52.

The rise in HUBC’s consolidated earnings was mainly attributable to the commencement of China Power Hub Generation Company (CPHGC) and PKR depreciation against USD.

During the period under review, the company’s turnover dipped by 20.62% YoY compared to sales in the corresponding period last year on the back of lower off-take from Hub pant and Narowal Plant as both plants remained shut down from Oct 19 to Nov 19.

HUBC’s gross margins were impressive as it expanded from 30% to 59% on an account of growing PCE Element in the capacity payments of Hub plant during the last quarter.

More notably, the share of profit of associate clocked in at Rs 5.15 billion against the loss of Rs 193 million due to rising earnings from CPHGC.

On the other hand, the company bore a colossal increase in finance cost which stood at Rs 6.25 billion, up by 2.12 times YoY owing to higher interest rate and markup on long term loans acquired to finance new projects.

 

Profit and Loss Account for the Half-year Ended December 31st 2019 (Rupees in '000)

 

Dec-19

Dec-18

% Change

Turnover

 24,653,589

 31,059,378

-20.62%

Operating costs

 (10,182,031)

 (21,648,514)

-52.97%

Gross Profit

 14,471,558

 9,410,864

53.78%

General and administration expenses

 (830,000)

 (675,629)

22.85%

Other income

 160,115

 224,888

-28.80%

Other operating expenses

 (26,271)

 (5,765)

355.70%

Profit from operations

 13,775,402

 8,954,358

53.84%

Finance costs

 (6,251,021)

 (2,935,597)

112.94%

Share of gain/loss from associates

 5,153,226

 (193,455)

-

Loss on shares to be transferred to GoB

 (1,009,029)

 -

-

Profit before taxation

 11,668,578

 5,825,306

100.31%

Taxation

 (157,888)

 (144,589)

9.20%

Profit for the year

 11,510,690

 5,680,717

102.63%

Basic and diluted earnings per share - in Rupees

 8.52

 4.51

88.91%

 

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