EFOODS & LOTPTA to unveil CY12 results, What to expect? – AKD Research
EFOODS is scheduled to announce its full year CY12 results on Jan 24’13. We expect the company to post NPAT of PkR2,391mn (EPS: PkR3.15) in CY12, up by a substantial 168%YoY, fueled by 35%YoY growth in revenues, 3 ppt YoY expansion in gross margins and 14%YoY decline in financial charges. For 4QCY12, we expect earnings to bounce back, jumping by 29%QoQ to PkR773mn (EPS: PkR1.02), the highest ever quarterly earnings to date. Higher milk prices will be the primary earnings driver for 4QCY12 where we expect the company to post 12%QoQ topline growth to PkR10,811mn while gross margins are also expected to improve by 90bps QoQ to 26.4%, even as seasonal lull in Ice Cream sales will slightly weigh down profitability in 4QCY12. We do not expect any dividend payout with the result. At current levels we have a Neutral stance on EFOODS, which is trading near our Dec’13 end Target Price of PkR98/share.
LOTPTA will announce its CY12 result on Jan 28’13. On an unconsolidated basis, we forecast LOTPTA to post NLAT of PkR592mn (LPS: 0.39) in CY12 compared with a NPAT of PKR4,178mn (EPS: PkR2.76) in CY11. Earnings decline is largely due to sharp fall in PTA-Px primary margins (-US$150/ton YoY), exacerbated by the PkR volatility. For 4QCY12, earnings will remain downbeat where we expect sequential loss to expand by 32% to PkR169mn (LPS: PkR0.11). Regional PTA-Px primary margins in 4QCY12 have further compressed to US$68/ton compared with US$82/ton in 3QCY12 on 9%QoQ rise in Px prices. However, investors should keep a look out for consolidated results, which will reflect energy efficiency gains from the recently commissioned co-generation power plant where we estimate approximate energy savings of ~PkR150mn in 4QCY12, translating into an EPS impact of PkR0.06. Similarly, consolidated loss for 4QCY12 may reduce to PkR72mn (LPS: PkR0.05). LOTPTA offers 8% upside to our Dec’13 end TP of PkR7.3/share. Accumulate.