Nishat Power Limited (NPL) is scheduled to announce its FY21 financial result on Sep 16th 2021. We expect the company to post a profit of PKR 599mn (EPS: PKR 1.69) during 4QFY21 (-48% YoY). Absence of debt portion in capacity payments and 9% YoY PKR appreciation are the reasons behind this decline. Sales are expected to increase by 36% YoY during 4QFY21 due to i) 321% YoY higher dispatches, and ii) 4% YoY higher FO prices. Finance cost is expected to decline by 52% YoY. Lower short term borrowings along with lower interest rates are the primary reasons behind this decline. On the circular debt front, CCOE has approved the 1st installment of eleven IPPs of 2002 Power Policy which is expected to be disbursed soon. As per Mar’21 accounts, the company has PKR 39.9/share net receivables. We believe this development will enhance the liquidity position of the company and higher payout is expected along with the result.
PPL: Bottom-line to grow by 28% YoY in 4QFY21
Pakistan Petroleum Limited (PPL) is expected to announce its financial result for FY21 on 17th Sep’21, where we project earnings to clock-in at PKR 52,206mn (EPS: PKR 19.19), up by 4% YoY. The growth in profitability comes on the back of i) 3% YoY uptick in oil production, and ii) 3% YoY increase in oil prices. Whereas, gas production declined by 4% YoY tagged with fall in Sui wellhead price by 13% YoY. Similarly, during 4QFY21, net profit is expected to portray a jump of 28% YoY, arriving at PKR 14,088mn (EPS: PKR 5.18) against PKR 11,028mn (EPS: PKR 4.05) in SPLY amid 23% and 2% YoY ascend in oil and gas production, respectively along with massive jump in oil prices by 154% YoY. However, Sui wellhead price declined by 18% YoY. Moreover, we expect the exploration expense to post a dip of 41% YoY in 4QFY21, settling at PKR 576mn given fall in seismic activity during the quarter.
MTL: FY21 Earnings to improve by 169% YoY
The board meeting of Millat Tractors Limited (MTL) is scheduled on 17th Sep’21, to announce the financial result for FY21. During FY21, we expect the company to post a profit after tax of PKR 5,782mn (EPS: PKR 103.14), drastically up by 169% YoY compared to PKR 2,151mn (EPS: PKR 38.36). This improvement in earnings is on account of surge in sales volumes by 71% YoY to 35,527 units vs. 20.722 units in FY20. On a quarterly basis, earnings are projected to clock-in at PKR 1,481mn (EPS: PKR 26.42), significantly up by 88% YoY compared to PKR 790mn (EPS: PKR 14.09). During the period under review, volumes increased by 58% YoY to 9,600 units due to massive demand for tractors on account of sales tax subsidy on tractors, drastic increase in export orders and higher yields on agricultural products. Gross margins are expected to decrease by 27bps YoY to 20.87% due to higher freight cost on import of raw material. On the other hand, other income is forecasted to increase by 37x on account of surge in short term investment. We expect company to announce cash dividend of PKR 50.00/share in 4QFY21 (FY21: PKR 100/share) compared to PKR 30.00/share in 4QFY20 (FY20: PKR 50.00/share).
Courtesy – AHL Research