By: Taurus Securities Limited
Attock petroleum limited is expected to announce its FY15 results on Aug’12 2015, wherein we expect the company to publish profit after tax of PKR3.0bn (EPS PKR35.6), down 32% YoY. Alone in 4Q, profits are likely to surge by 47% YoY to PKR1.0bn (EPS PKR12.0). Along with the results, we expect BoD to announce final cash dividend of PKR19.5/share, taking full year payout to PKR32/share.
During FY15, revenues are likely to dilute by 16.1% to PKR172bn due to dip in oil prices. On the gross profits front, we expect 27% YoY drop to PKR4.3bn, mainly linked to com‐ pressing margins on FO while inventory losses during previous two quarters (post hefty dip in POL prices) would also weigh on the profits.
During 4QFY15, earnings are likely to rebound on the back of expected inventory gains amounting to ~PKR250bn.
At current levels, the scrip is trading at FY16F PE of 10.0x. The stock is offering an upside of 9% to our Jun’16 DCF based TP of PKR628/share along with the dividend yield of 9.0% for FY15. Thus, we maintain our stance at Buy.