November 1, 2020 (MLN): The highlights of the 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:
On Saturday, the Government decided to reduce the price of various petroleum products from Nov 01, 2020.
On the same day, the State Bank of Pakistan (SBP) announced the auction calendar for November 2020 to January 2021 in which it plans to raise Rs.3.905 trillion through the sale of Government Securities.
On Thursday, Adviser to the Prime Minister on Finance Dr. Abdul Hafeez Shaikh chaired the special meeting of the ECC today to approve the “PM’s Package for Rabi Crops-Specially wheat”.
The ECC also approved in principle the proposal aimed at facilitating the telecom sector by the waiver of certain taxes. In addition, it also allowed Rs 200 increase in support price for wheat.
Besides, a meeting of the Cabinet Committee on Energy (CCOE) was held under the Chairmanship of Federal Minister for Planning, Development and Special Initiatives Asad Umar, to review the Circular Debt Reporting Format developed by Power Division in consultation with NEPRA.
Cabinet Committee on Energy reviewed the Circular Debt Reporting Format developed by Power Division in consultation with NEPRA while approving the format the CCoE directed Power Division to workout detailed projections and mitigations strategies for Circular Debt build up as well monitor the implementation progress of the reform measures to minimize the Circular Debt buildup in the power sector.
Meanwhile, on account of violation of SBP’s rules and regulations, the State Bank of Pakistan (SBP) imposed monetary penalty worth Rs.271.622 million on four banks during July-September 2020.
Furthermore, SBP introduced a new mechanism to enable companies in Pakistan to conveniently remit out disinvestment proceeds to their foreign shareholders.
On Wednesday, Hammad Azhar rejected report claiming govt caused loss of Rs 404 bln due to sugar mafias.
On Tuesday, Moody's Investors Service assigned a first-time corporate family rating (CFR) of B3 to Pakistan Water and Power Development Authority (WAPDA), along with a ‘stable’ rating outlook.
On Monday, the Oil and Gas Regulatory Authority (OGRA), revised the sale prices and minimum charges in respect of natural gas sold by Sui Southern Gas Company and Sui Northern Gas Company, to various categories of their retail consumers, with effect from September 1, 2020.
Announcements
On the equity front, Hascol Petroleum Limited announced to obtain a stay order from the Sindh High Court against a decision of the Oil and Gas Regulatory Authority (OGRA), which had suspended the marketing license of the company for Khyber Pakhtunkhwa.
Besides, the Board of Directors of Loads Limited in its meeting held on October 28, 2020 resolved that the Company intends, in the near future, to carry out a right issue of ordinary shares up to PKR 1 billion.
In addition to the above, the Board of Directors of Interloop Limited approved a scheme of amalgamation to amalgamate its wholly-owned subsidiary, IL Apparel (Private) Limited with and into the Interloop Limited.
Moreover, the BoDs of Fauji Fertilizer Company, in its meeting held on October 28, 2020, approved submission of an Expression of Interest (EOI) for the acquisition of majority shares, in Foundation Wind Energy-l Limited and Foundation Wind Energy-ll Limited, collectively held by Fauji Fertilizer Bin Qasim Limited (FFBL) and Fauji Foundation.
Matco Foods Limited, in its Annual General Meeting held on October 24, 2020, was granted approval to further invest up to Rs. 50 million in Barentz Pakistan (Private) Limited, an associated company in order to meet its working capital requirements and operational expenses at the rate of KIBOR + 2%.
Financial Results:
Apart from this, several listed companies announced their financial results amid ongoing earnings season last week, some of which are as follows:
Lucky Cement Limited reported a remarkable 3.36x increase in net profits to Rs 5.13 billion for 1QFy21 against the profits of Rs 1.5 billion earned in the same quarter last year.
United Bank Limited (UBL) made profits of Rs. 15.4 billion for the nine months ended September 30, 2020, i.e. merely 2% lower as compared to the profits of the same period last year (SPLY).
Kohat Cement Company Limited witnessed whopping 5.75x increase in net profits to Rs 507 million for the quarter ended on September 2020, compared to the profits of Rs 88 million earned in the same quarter last year.
Pakistan State Oil (PSO) earned net profits of Rs 5.27 billion in 1QFY21, which was 50.4% YoY higher than the profits of Rs 3.47 billion reported in the same quarter of last year.
Unity Food Limited (UNITY)’s bottom-line grew by more than 6 times YoY, to Rs 634 million, translating into an EPS of Rs 0.98 when compared with the same period last year in which net profits were recorded at Rs 92 million (EPS: Rs 0.15).
National Bank of Pakistan (NBP) earned unconsolidated net profits of Rs 26 billion for nine months ended on September 2020, which was 60% higher than the profits reported in the same period last year.
Fauji Fertilizer Bin Qasim Limited (FFBL) posted net profits of Rs 24.4 million for the nine months ended on September 2020 against the loss of Rs 5 billion reported in the corresponding period last year.
Pak Suzuki Motor Company once again reported losses of Rs. 2.6 billion (LPS: 31.58) for the nine months ended September 30, 2020, i.e. only 3.2% lower than the losses incurred during the same period of last year.
MCB Bank Limited reported a 45% growth in its earnings for the nine months ended September 30, 2020, from Rs. 16.1 billion (EPS: 13.63) to Rs. 23.5 billion (EPS: 19.75).
Unilever Pakistan Foods Limited (UPFL) posted its profit after tax of Rs 2.49 billion (EPS: Rs 391.53) for the nine-months ended September 30, 2020, showing a robust growth of 61% YoY against the net profits of Rs 1.54 billion (EPS: Rs 243.04) of the corresponding period last year.
K-Electric Limited (KEL), the sole electricity provider to Karachi, posted net profits of Rs 3.591 billion for nine months ended on March 31, 2020, i.e. around 37% lower than the net profits of Rs 5.70 billion earned in the corresponding period of last year.
Fauji Fertilizer Company announced earnings of Rs. 18 billion (EPS: 18.17) for the nine months ended September 30, 2020, i.e. around 36% higher than the earnings reported in the same period of last year.
Hub Power Company Limited (HUBCO) made profits of Rs. 8.44 billion (EPS: 6.28) for the quarter ended September 30, 2020, which shows a growth of 46.4% as compared to the earnings of the same period last year.
Major automaker Indus Motors (PSX: INDU)’s net profits for the quarter ended on September 30th, 2020 surged by 40% YoY to Rs 1.84 billion as opposed to Rs 1.3 billion reported at the end of 1QFY20.
Atlas Honda Limited’s earnings for the half-year ended September 30, 2020, stood at Rs. 885.3 million (EPS: 7.14), showing a decline of 37% as compared to the same period of last year.
Bank of Punjab (BOP) disclosed a mere 6.5% YoY decline in nine months’ profits to Rs 5.7 billion compared to Rs 6 billion reaped in the same period last year.
Fatima Fertilizers Limited reported earnings of Rs. 9.56 billion (EPS: 4.55) for the nine months ended September 30, 2020, which is around 4% higher than the profits recorded in the same period of last year.
The state-owned Oil and Gas Development Company Limited (OGDC)’s profitability for 1QFY21 nosedived by 14% YoY to Rs 23.4 billion from Rs 27.3 billion realized in 1QFY20.
Interloop Limited reported net profit after tax of Rs 1.33 billion (EPS: Rs1.53) for 1QFY21, up by 2.7x YoY, compared to Rs 491 million (EPS: Rs 0.56) in the same period last year.
Fauji Cement Company Limited (FCCL) posted 2.3x increase in net profits for 1QFY21 to Rs 695.58 million as opposed to the profits of Rs 292.8 million in the same quarter of last year.
BankIslami Pakistan Limited made profits of Rs. 1.55 billion for the nine months ended September 30, 2020, i.e. around 55% higher than the earnings of the same period last year.
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