The company is expected to post a profit after tax of PKR 1,050mn (EPS: PKR 0.69) during 4QCY21, down by 4% YoY compared to PKR 1,096mn (EPS: PKR 0.72) during 4QCY20. During the quarter, sales are expected to increase by 37% YoY due to 61% YoY rise in PTA prices. Gross margins are forecast to settle at 7.9% compared to 12.2% during same period last year.

Decline in gross margins is expected due to higher Acetic Acid prices, we view. However, PTA margins have increased by 59% YoY during 4QCY21. Moreover, other income is expected to increase by 53% QoQ to PKR 444mn during 4QCY21 due to higher level of short term investments and higher interest rates. This will take the CY21 earnings to PKR 4,279mn (EPS: PKR 2.83) vs. PKR 2,125mn (EPS: PKR 1.40) in SPLY.

Courtesy-AHL Research