By: Azee Securities Private Limited
In our today’s morning report we will discuss the upcoming board meeting of Pakistan Oilfields Limited (POL) and Attock Petroleum Limited (APL) for 1HFY16 to be held on January 29 & January 28, 2016 respectively.
POL: Earning to decline massively: We anticipate profitability of the company to further decline as profit after taxation to decrease by 8% QoQ to Rs 1.29 billion (EPS: Rs 5.46), from Rs 1.41 billion (EPS: Rs 5.95) in 1QFY16 likely due to massive decline in crude oil prices by 20% QoQ and lower other income due to absent of dividend income despite rise in oil & gas production. Similarly, cumulative profitability likely to shrinks by 50% to Rs 2.69 billion (EPS: Rs 11.41) compared to Rs 5.34 billion (EPS: Rs 22.60) in 1HFY15. Lower earning likely due to 48% average dip in crude oil prices and 9% decline in oil production in 1HFY16. We anticipate the company to announce dividend of Rs 12/share as an interim payout along with its half yearly result announcement.
APL: Profits to show hefty decline: We expect company to post decline in profitability by 5% as after tax earnings to reach at Rs 1.39 billion for the 1HFY16, translating into an EPS (earning per share) of Rs 16.76 as against Rs 1.46 billion (EPS: Rs 17.69) recorded in 1HFY15. Lower profitability expected due to record lower prices of crude oil which likely to incur inventory losses of around Rs 584 million (per share after tax impact of Rs 6.59), lower volumetric sales of 14% and decline in other income The top line is likely to decrease by 35% to Rs 65.18 billion mainly due to drop in volumetric sales by 14% at 913k tons likely due to 38% YoY fall in furnace oil volumetric sales. Gross profit likely to increase by 12% to Rs 2.10 billion as against Rs 1.87 billion in 1HFY15. The corporate results are expected to be accompanied with a cash dividend of Rs 12/share.