APL profit likely to increase

oilBoard of Directors of Attock Petroleum (APL) is scheduled to meet on April 17, 2014 to discuss its 9MFY14 financial results. Analysts expect profitability of the Company to soar by 32%YoY to PKR3.9billion (US$39 million) translating into EPS: PKR 46.7 as compared to PKR2.9billion (EPS: PKR35.5) during the same period last year; up by 32%YoY. The robust earnings growth can be attributed to higher sales (by volume). APL managed to increase its volumetric sale of Mogas (40%), HSD (24%) and FO  (13%) during the period under review.

As a result APL’s market share of Mogas and HSD to 7% and 12% respectively while the share of FO jumped by to 10% in 9MFY14 compared with same period last year. Finance cost and other operating income are expected to fall due to steep decline in late payment charges and mark-up income on late payments. However, these inflows are likely to increase going forward on re-emergence of circular debt in energy chain, estimated around Rs300 billion.

On quarterly basis, InvestCap a leading brokerage house expects APL’s third quarter earnings to witness a decline of 9% to Rs1.2 billion (EPS: Rs14.5) as against net profit of Rs1.3 billion (EPS: Rs16) for 2QFY14. The decline in profit is likely on the back of lower volumes of HSD and Mogas and modest inventory losses on account of a minor decline in Mogas price effective from 1st Mar’14.

Going forward, the brokerage house expects the Company to increase its market share through higher volumes in 4QFY14. The approaching summer season is likely to increase sale of FO and HSD because of increase in power generation and irrigation needs.

 

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