KARACHI STOCK MARKET NEWS

Fauji Fertilizer Bin Qasim did not let a drop in production levels get in its way to achieving all-time high profits in 2011. The company’s net profit surged 65% to record high of Rs10.77 billion in 2011 compared with Rs6.51 billion posted in 2010, ….Earnings growth has been achieved despite a fall in production as prices of the two most-consumed fertilizers urea and di-ammonia phosphate rose by 56% and 43%, respectively, on a yearly basis, …Net sales improved by 29% to Rs55.6 billion in 2011 from the preceding year’s Rs43.2 billion. The result is higher than market expectation as analysts expected net profit to stand around the Rs10.2 billion mark.

Company’s urea sales are expected to have dropped 17% to 434,000 tons and di-ammonia phosphate by 1% to 662,000 tons during the period under review, …. Higher prices of both urea and DAP took overall gross margins to an impressive 36% in 2011 compared with last year’s 31%. The result was also accompanied by a final cash dividend of Rs3.5 per share, taking the cumulative payout to Rs10 per share…. Express Tribune

Pakistan Petroleum Limited’s net profit jumped 21% to Rs20.1 billion on the back of higher sales during July to December 2011.The result is also accompanied with an interim cash dividend of Rs5 per share, ….The phenomenal growth in earnings primarily stems from a significant uptick in sales coupled with support from other operating income, ….The country’s second largest oil and gas explorer witnessed an upsurge of 21% in net sales to Rs45.3 billion on account of favourable price in the first half of 2012. On the pricing front, higher Arab light crude price against the relevant period last year translated into improved hydrocarbon prices while volumes improved on the back of enhanced production from Kohat-based fields Tal and Naspha blocks in oil and Kandkhot for gas, ….

Moreover, the company’s other income grew by impressive 84% to stand at Rs3.5 billion against Rs1.9 billion in the same period last year due to growing cash balances. This helped the company book higher interest income on bank placements, treasury bills along with gains from forex deposits.Field expenditures depicted a 22% jump mainly on the back of dry well expenses attributed to the suspended wells during the quarter and heightened seismic activity in Sui during the period under review. Arab light price increase by 4.5% in the six months coupled with 1.5% depreciation in the rupee against the dollar will translate into higher wellhead gas prices for the uncapped fields of Pakistan Petroleum  in the second half of the fiscal year 2012. Uncapped fields contribute 70% to PPL’s total gas production….. Express Tribune

A strong performance by the dairy segment pushed Engro Foods’ net profit up four fold to Rs891 million in 2011 against Rs176 million in 2010. Engro Foods has successfully grabbed 45% of the market share in ultra-high temperature goods particularly its packaged milk Olpers,…. The subsidiary is also expected to surpass the fertiliser business and become the highest revenue making wing of the conglomerate soon.
Revenues grew by 43% to Rs29.9 billion while gross margins grew by 1.23% to 22.2%,

….The recently launched dairy product Omung could be a game changer for the packaged milk industry as it is very competitively priced to the still dominant loose milk, which represents more than 90% of the milk market, ….Financial charges declining by 19% to Rs250 million on a quarterly basis also contributed to the net profit growth.Improving margins, particularly the ice cream segment as well as sales growth, is expected to drive earnings growth going forward, ….“Furthermore, geographic diversification with the acquisition of Al-Safa could also be a long-term value driver for the company,…Engro Corporation is all set to enter the halal food business in North America after signing an agreement with US-based Al Safa Halal to purchase its food business. The precise size of the transaction was not disclosed, though the company stated that its acquisition, inventories and brand-building efforts would cost up to $15 million….. Express Tribune

The Finance Minister Dr. Hafeez Shaikh said on Saturday that he accepted all the proposals of Securities and Exchange Commission of Pakistan (SECP) regarding relaxing rules for Capital Gains Tax (CGT) on shares transactions. SECP proposals on CGT are accepted and will be implemented with effect from April 1, 2012, said minister on his exclusive visit at the Karachi Stock Exchange (KSE). The SECP had also proposed to abolish withholding tax (WHT) under Section 233A to rectify double tax anomaly and freeze the CGT rate at 10 percent on capital gains arising on securities held for a period of up to six months and eight percent on securities held for a period of over six months and less than a year.

Earlier, the SECP had proposed to the Ministry of Finance that the Federal Board of Revenue (FBR) should not inquire stock market investors about their sources of income till June 30, 2014 under the CGT regime as such records were not available with them. Set of proposals added that post June 2014, highest or peak value of an investor’s portfolio between now till then, should be treated as income generated from the capital market and part of investor’s wealth. The regulator had also recommended centralized CGT collection mechanism at National Clearing Company of Pakistan (NCCPL), and to abolish the broker’s liability in this regard. According to the proposals, NCCPL would act as the withholding agent to deduct and deposit the CGT from investors’ transactions and deposit the net tax collection with the FBR at the end of each month….Daily Times

The State Bank of Pakistan (SBP) Governor Yaseen Anwar will announce the next monetary policy for the months of February and March on February 11th,…..The change in the schedule of board meetings has been made to take into consideration the latest data on inflation released by the Pakistan Bureau of Statistics, which now becomes available at the month’s beginning instead of the second week.The board meetings on monetary policy….. will now be held in the first half of February, April, June, August, October and December…. Express Tribune

EFOODS : 24TH

PPL : 25TH

FFBL : 26TH 

LOTPTA

NRL : 28TH

LUCK : 30TH

FFC

The KSE-100 closed down on the final trading session of 2011.

Market Low : 11,294.10

Market High : 11,467.70

Market Close :11,347.66  -88.01 points

What does a company do if it has made a $1.1 billion leveraged bet on a fertiliser manufacturing business that relies on a government that consistently goes back on its word? For the Engro Corporation, it involves exploring the import of its feedstock from abroad, as well as the possibility that it may sell its principal product – urea – to Indian farmers instead of their Pakistani counterparts. “If the Pakistan farmer pays world market prices, we [Engro] can afford to produce urea using LNG [liquefied natural gas] as our feedstock,” said Asad Umar, the CEO of Engro Corporation, ….. “However, the government will probably not let us sell to them at those prices, so we can simply export our product to Haryana and Punjab in India.”

Engro owns what is currently the largest single-train urea manufacturing facility in the world, based in Daharki, Sindh. It relies on natural gas as the raw material for its production and has a sovereign guarantee issued by the government of Pakistan that the state-owned Sui Northern Gas Pipelines would provide an uninterrupted supply of 100 million cubic feet per day (mmcfd).Despite rulings from the Sindh High Court that it must live up to its contractual obligations, SNGP has not been able to provide the gas that Engro needs, most recently informing the company on Friday morning that it would be indefinitely shutting off gas to the Dharki plant for the winter….

“To me, LNG is the future,” said Khalid Subhani, the CEO of Engro Fertilizers, a subsidiary of the Engro Corporation. “It is possible to run a urea plant on coal gasification, but for the quantities of gas we need, the investment would be too high, close to $900 million.”The conglomerate has recently set up a new subsidiary called Elengy Pakistan, which is seeking a licence to begin importing LNG. The company plans on using the technical expertise gained for its chemical storage and shipping terminal at Port Qasim – Engro Vopak – to help it run an LNG import terminal in Karachi.Yet it is the government’s failure to make good on its sovereign guarantee that has most investors spooked, leading to a slide in Engro’s stock of about 21% over the past 12 months, compared to a 2% slide for the benchmark KSE-100 index over the same period. “It’s a bit like the government defaulting on a treasury bond,” said one banker in Karachi…

Engro’s management insists that the subsidised gas supply is not the only reason why its business model makes sense and even goes so far as calling for a removal of the subsidy.“Let the market set the prices for gas and then see who is competitive,” said Asad Umar. “We are willing to put our money where our mouth is. We want zero subsidies and zero tariff protection for our product.”…..The Express Tribune

Engro Corporation’s profits rose 34% to Rs5.4 billion during January to September 2011 as its single train fertiliser plant, which is the largest in the world, made its first impact on the company’s financial statements. Increased profits from Engro Fertiliser and Engro Foods along with lower losses from Engro Polymer are the primary reasons for the growth, …..The conglomerate’s consolidated results are in line with market expectations as analysts expected the figure to stand between Rs5.3 and Rs5.8 billion.The board of directors announced an interim dividend of Rs2 per ordinary share along with the result.Engro’s new plant EnVen, built at a cost of $1.3 billion, started commercial operations at the end of June. Although the plant remained shut for much of July, it operated at 80% gas flow for the rest of the period under review.The fertiliser sector of the corporation contributed 62% to the total profits.

Net sales surged 47% to Rs79 billion during the period under review compared with last year’s Rs53.6 billion. Fertiliser and food segments lead the growth with 48% increase in urea prices and 150% jump in volumetric urea sales, Engro Fertiliser net profit rose 22% to Rs3.5 billion during the period under review, … Engro Foods also reported healthy profits of Rs408 million compared to a meagre bottom-line of Rs35 million in the same period last year.The food segment jumped due to its UHT milk business which increased its market share to 44% in nine months of 2011 from 39% in December 2010…. The Express Tribune

Fauji Fertilizer Company’s net profit almost doubled to Rs13.8 billion in the first nine months of 2011 as higher prices acted as a major factor.Urea sales increased by 12.5% to 1.8 million tons despite ongoing gas curtailment, but higher margins on urea – 57% against last year’s 45% – remained the major earnings driver for the company,….. The board of directors  also declared a third interim cash dividend of Rs.5.5, taking the total payout to Rs14.75  in 2011.Besides this, other income jumping 96% to Rs4.4 billion amid improved dividend from subsidiary Fauji Fertiliser Bin Qasim also contributed to the bottom-line growth,…..The finance cost decreased by 37% to Rs1.9 billion in the period under review against Rs3 billion in the same period last year…In the third quarter, the company’s profit grew 195% to post earnings per share of Rs.6.7 as last year sales were affected by floods….. The Express Tribune

Fauji Fertilizer Bin Qasim profits more than doubled to Rs7.2 billion in the first nine months of 2011 on the back of higher sales of the commodity,…..The board of directors also announced an interim cash dividend of Rs3 per share, taking the total payout to Rs6.5 per ordinary Rs10 share in 2011. Substantial growth in earnings was because of massive increase in fertilizer prices, …. Fertilisers DAP and urea prices in market were, on average, higher by 47% and 56% on a yearly basis, respectively. Net sales rose 64% to Rs36.33 billion during January to September 2011 compared with Rs22 billion in the same period last year…. In third quarter alone, FFBL posted its highest ever quarterly earnings as the company made Rs3.7 billion in 92 days…. The Express Tribune

DG Khan Cement and Lucky Cement announced swelling profits on the back of better higher prices and sales, showing signs that the sector is getting back on track after a torrid run in financial year 2011. DG Khan Cement profits jumped 14 times to Rs318 million while Lucky Cement net profit more  than doubled to Rs1,506 million in the first quarter of 2012, …..Around 80 per cent of cement plants suffered losses in the previous financial year on the back of stagnant local consumption and non-payment of inland freight subsidy.DG Khan Cement’s earnings was almost double analysts  expectations as they projected it to stand around Rs163 million. Gross margins of the company improved to 30% during July to September from 19% in the same period last year, …..  Net sales of the company went up by 44% to Rs5.09 billion during the period under review primarily driven by  36% higher net prices….. Lucky Cement net profit increased 107% to Rs1.51 billion on increased revenue from sales during the period under review.Net sales rose 34% to Rs7.5 billion on the back of 30% increase in sales and prices.Conversely, financial charges reported a sharp decline of 44%
 to Rs81 million because of lower long term debt…. The Express Tribune

NCPL : 10% Cash - EPS : 4.38

APL : EPS : 15.88

ATRL : EPS : 10.47

POL : EPS : 14.61

SHEL : EPS : 16.39

AHCL : EPS : 4.34

AHL : EPS : 2.07

NRL :  EPS : 10.36

DGKC : EPS : 0.81

KAPCO : EPS : 1.36

PPL : EPS : 7.52

MCB : 30% CASH - EPS : 18.55

LUCK  : EPS : 4.66

FFBL :  30% CASH - EPS :7.68

HUBC : EPS : 1.16

NML :  EPS : 2.93

ICI :  EPS : 11.12

PRL :  EPS : 0.70

OGDC : 15% CASH - EPS : 5.10

DAWH : EPS : 0.77

NBP : EPS : 6.78

FFC : 55% CASH - EPS : 16.33

ENGRO : 20% CASH - EPS : 14.21

PSO :  EPS : 14.50

NCPL : 8TH

APL : 17TH

ATRL

POL : 18TH ( 3PM )

SHEL : 20TH

AHCL

AHL

NRL : 5PM

DGKC : 22ND

KAPCO : 24TH

PPL 

MCB 

LUCK

FFBL : 25TH

ICI : 26TH

PRL

HUBCO : 26TH

OGDC : 27TH

DAWH

FFC : 29TH ( RESULT ANNOUNCED ON 31ST )

ENGRO : 31ST

The State Bank of Pakistan announced a cut of 150 basis points in its discount rate on Saturday, from 13.5% to 12%, effective immediately from October 10th 2011.

Engro Foods switched to a profit of Rs216 million in the first half of 2011 against loss of Rs177 million in the same period last year, according to results sent to the Karachi Stock Exchange on Wednesday.Revenues grew by 41 per cent to Rs13.4 billion in the period under review on the growing market share of the company products. Increasing market share for the company, the juice, ice cream and milk sector is bearing well… The company’s ice cream business Omore expanded from Punjab to other parts of the country including Karachi in the period under review. Engro Foods already moved to number one slot in the UHT milk market share last year.The company kept a lid on its distribution and marketing expanses as they eased to Rs1.70 billion during January to June 2011 compared with Rs1.74 billion in the same period last year…… Express Tribune

PPL : 9th

PSO :

DAWH : 10th 

OGDC : 12th

ENGRO :

SHEL : 17th

 

LUCKY : 40% Cash - EPS  : 12.28

PPL : 20% Cash + 10% Bonus  -  EPS : 26.31

PSO : 20% Cash - EPS : 86.71

DAWH :  EPS : 3

OGDC : 25% Cash - EPS : 14.77

ENGRO : 20% Cash - EPS : 8.43

SHEL : 

 

The State Bank of Pakistan announced a cut of 50 basis points in its discount rate on Saturday, from 14% to 13.5%, effective immediately from August 1st 2011.

MCB : 30% Cash - EPS : 12.64

FFBL :  22.5% Cash - EPS : 3.76

FFC :  47.5% Cash  - EPS  : 9.65

FFBL : 26th

MCB

FFC : 29th

LUCKY : 30th