By: Arif Habib Limited
1) NPL: 1QFY16 earnings to decline by 15% YoY: Nishat Power Limited (NPL) Board of Directors are scheduled to meet on 26th Oct 2015, to approve and announce its 1QFY16 financial results. We estimate the company to register 15%YoY decrease in the bottom line to PKR 676mn (EPS: PKR1.91) against PKR 792mn (EPS: PKR 2.24) in 1QFY15. Along with the result, we expect the company to announce dividend of PKR 1.25/share. The company is estimated to register the total dispatches of 333 GWh (77% capacity utilization) during 1QFY16, a decline of 15% YoY compared to 392GWh (93% capacity utilization) recorded during SPLY. Net sales are anticipated to decline by 30% YoY majorly due to 33% YoY decline in FO prices .The average realized fuel prices for NPL is expected to fall to PKR 46,802/ton (PKR 69,985/ton during 1QFY15) during the period under consideration. On QoQ basis, earnings are expected to register a growth of 13%.
2) PNSC: 1QFY16 earnings to surge by 72% YoY: The Board of Directors of Pakistan National Shipping Corporation (PNSC) are scheduled to meet on 27th Oct to discuss and disclose 1QFY16 results. We remain bullish on the chances of the company to stage a comeback from the dismal showing in 1QFY15, when they posted consolidated after-tax earnings of PKR 187mn (EPS: 1.42). During 1QFY16, we expect the company to register profit after tax of PKR 321mn (PKR 2.43/share), up 72% YoY. Our optimism stems from (i) Baltic Dry Index recovering ~54% QoQ on average during 1QFY16, lifting up bulk fleet revenues (ii) reduction in chartering business of refined fuels from PSO to enhance margins, (iii) lower chartering costs per ton due to 15% QoQ decline in Baltic Dirty Tanker Index, (iv) lower financing costs in low KIBOR environment, and (v) perhaps most importantly, addition of MT Shalamar, the 4th Oil tanker added last December, to reflect in revenues and margins.