Pakistan Aluminium Beverage Cans Limited (PABC) held its analyst briefing earlier today, wherein the management discussed the following:

*        The company has posted Net Profit of PkR2.7bn (EPS: PkR7.48) in CY22, 69% higher than the same period last year. Revenues almost doubled during the period, increasing by 96%YoY to PkR14.1bn.

*        Of the revenue generated during the year, export revenue made up ~42% of total revenues, whereas the local market made up 58%. Gross profit clocked in at 33%, slightly lower than the 35.5% reported in the SPLY.

*        Regarding the expansion, the company apprised that the machinery had been imported, and the COD is expected in August this year. The company can produce ~1.2bn cans per annum following the expansion.

*        PABC anticipates revenues to reach ~PkR18bn by CY23, with volumetric sales of 750mn cans during the period. This would correspond to a 27% increase in revenues during the period.

*        The company anticipates a slight volume dip this year in the local market due to the prevailing economic situation. However, it wants to increase its exports to compensate for the drop during the year.

*        PABC has shifted its focus away from the North American market due to increased freight costs. As a result, the company is looking to expand its focus on Afghanistan, Uzbekistan, Tajikistan and Bangladesh.

*        The company estimates the single-use beverage market in Pakistan to be ~3.1-3.2bn cans per year, out of which the share of cans is ~10%. This share of cans in the total beverage market increased from 1% some years ago, and the company sees the local market as a significant growth opportunity.

*        The company was required to furnish 100% cash margins until Apr’23; however, since then, the cash margins on imports of raw materials have eased.

*        Within the export revenues, the share of Afghanistan is ~32-35%. The company does not see any risks associated with the market regarding honouring payments.

Courtesy – AKD Research