AKD Quotidian about — OGDC: FY13 Result Preview

Karachi, August 06, 2013 (PPI-OT): OGDC will be announcing its FY13 results today. AKD Securities expects the company to post NPAT of PkR102.6bn (EPS: PkR23.86), which would denote a growth of 6%YoY.

According to AKD Securities revenues are forecasted to expand by 15%YoY in FY13 to PkR228bn, underscored by volumetric growth in hydrocarbon production, particularly crude oil. However, jump in exploration expenses (+2.1Y0Y) as well as higher effective tax rate (33% for FY13 compared with 27% for FY12) are expected to restrict bottom-line growth in FY13.

For 4QFYI3, AKD Securities forecasts the company to post NPAT of PkR2G.9bn (EPS: PkR6.26), up slightly by 2%Q0Q. AKD Securities expects OGDC to announce a final cash dividend of PkR2.5/share, taking cumulative FY13 cash payout to PkRB/share. AKD Securities currently have an Accumulate stance on OGDC with a TP of PkR260Jshare.

OGDC: FY13 Result Preview

 (PkRmn)                      FYI3F     YoY   4QFYI3F  QoQ

 NetSates                    228,080    15%   58,989   1%
 Gross Profit                163,124    18%   42,823   4%
 Other Income                14,986     55%    4,264  10%
 Exp. and Prospecting exp.   12,727    214%    3,778  10%
 NPBT                        152,589    15%   39,901   4%
 NPAT                        102,604     6%   26,934   2%
 EPS (PkR)                   23.86             6,26

Source: Company Reports and AKO Research

BAFL: 1HCY13 Result Preview

The Board of Directors of Bank Alfalah Limited (BAFL) is scheduled to meet on Aug 10’13 to consider the bank’s IHCVI3 result. In this regard, AKD Securities expects the bank to post NPAT of PkRI .96bn (EPS: PkR1 .45) in IHCYI3 vs. NPAT of PkR2.33bn (EPS: PkR1.72) in 1HCYI2, translating into a decline of 16%YoY. In 2QCYI3 alone, AKD Securities expects NPAT of PkR950mn, down by 6%QoQ. No payout is expected alongside results. Key highlights of upcoming 1HCYI3 results are expected to be

13%YoY decline in NIl due to tighter NIMs

A 23%YoY reduction in total provisions

Strong 25%YoY non-interest income growth primarily driven by higher capital gains

Relatively contained 7%YoY increase in non-interest expenses.

Having gained 21%CYTD, BAFL trades at a CY13F P/Bat O.91x, PIE of 7.5x and D/Y of 9.8%. In this regard, BAFL remains a preferred banking sector play where AKD Securities points to 1) a likely higher interest rate environment ahead which should expand NIMs and 2) potential divestment of Wand Telecom by the Abu Dhabi Group which may lead to sizeable gains for BAFL. While KASB Securities Limited targets price of PkR20/share implies a Neutral stance, AKD Securities will formally look to revisit KASB Securities Limited investments case post 1HCY13 results.

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