PPL: 1QFY13 EPS to jump by 16% YoY – BMA Capital
With a double digit increase in oil (21%) and 5% decline in gas production, the second quarter for PPL is expected to conclude on a positive note.
The 1QFY13 earnings are expected to jump up by 16% to PKR11.5bn (EPS: PKR7.01) compared to PKR7.7bn (EPS PKR5.93) in the same period last year.
The improvement in oil production would be led by Nashpa, Adhi and Makori East despite decline in flows from Mela and Adam by 21% and 54% respectively.
On the other hand total gas flows are expected to decline by 5% YoY due to a major decline from Sui on account of annual field depreciation, Sawan (21% decline) and Kandhkot (5% decline).
On average, oil prices during the period remained flat at USD108/bbl compared to the same period last year.
With these oil prices and higher YoY well head gas prices, the company is expected to post a 12% improvement in net sales to PKR25.3bn compared to PKR22.6bn in the same period last year.
With double digit earnings growth expected to continue for the third consecutive fiscal year (FY13) after additional flows from above listed triggers, we rate PPL as a potential outperformer in FY13.