ICI Pakistan Limited (ICI) is scheduled to announce its 1QFY23 financial result on Oct 19th, 2022. We expect the company to post a profit after tax (PAT) of PKR 1,679mn (EPS: PKR 18.18) compared to a profit after tax of PKR 3,602mn (EPS: PKR 39.00) during the same period of last year. The decline in earnings is expected due to absence of a gain on re-measurement of existing interest in NutriCo Pakistan, higher taxation, and higher finance cost.

To recall, ICI has executed a SPA with Morinaga Milk to sell its 21.8mn share of NutriCo Morinaga at USD 2.07/share. If we include the gain (~PKR 7,624mn), the earnings for 1QFY23 will be PKR 73.49/share.

Sales in 1QFY23 are expected to climb by 28% YoY to PKR 27.4bn due to higher sales of the Pharma, Animal Health, and NutriCo Morinaga. Finance cost is expected to increase by 250% YoY | 84% QoQ on the back of higher interest rates along with higher levels of short-term borrowings. The company is expected to book an exchange loss of PKR 354mn due to PKR depreciation.

Courtesy- AHL Research