Karachi, September 13, 2012 (PPI-OT): PTC announced its FY12 results recently where the company’s consolidated profits grew by 36%YoY to PKR 11.4 billion (EPS: PKR 2.4), However, the company skipped its dividend payout, presumably due to conservation of cash for the upcoming VSS expense.
According to AKD Securities, standalone profitability was done slightly by 3%YoY to PKR 7.2 billion (EPS: PKR 1.41).
Tax reversal boosted 4QFY12 earnings: Consolidated earnings for 4QFY12 came in at PKR 4.4 billion, much higher than AKD Securities’ estimated of PKR 2.1 billion, where the deviation was due to lower tax expense (effective tax rate of 16.8% compared with 9MFY12 effective tax rate of 39.5%) as well as higher ‘other income’, while operating profit of PKR 3.6 billion was slightly higher than AKD Securities’ estimates of PKR 3.4 billion. Standalone 4QFY12 earnings were also higher than AKD Securities’ estimates due to higher than expected dividend from PTML(Ufone).
FY12 was year of revival for the fixed line business: Topline of the fixed line business was up by 9%YoY to PKR 60.0 billion, reversing three years of decline in fixed line revenues. Introduction of innovative products coupled with uptick in broadband subscribers is expected to have boosted revenues while AKD Securities also senses a marked change in the revenue mix of fixed line business with increasing contribution of non-voice revenues. Furthermore, operating profit for FY12 was up by 29%YoY following 130bps expansion in operating profitability to have risen by 4%YoY to PKR 10.7 billion, following a 7%YoY rise in revenues to ~ PKR 51 billion.
Outlook: Successful implementation of ICH would be a game changer for PTC where the said mechanism could result in incremental annual revenues of up to PKR 50 billion, in AKD Securities’ view. At current levels, PTC is trading slightly above AKD Securities’ ex-ICH target price of PKR 18.2/share.
Aug’12 Auto Sales: PSMC led the pack!
According to recent statistics released by PAMA, sales volumes of the auto industry (Cars and LCVs) are down by 30%YoY in 2MFY13 to 20,818 units. Cars sales declined by 28%YoY to 18,325 units in 2MFY13 vs. 25,553 units in the same period last year. On a sequential basis, industry volumes were at par with Jul’12 while car segment sales were down 3.7%MoM in Aug’12. Coming from the low base of last year (demand destruction due to 16%GST imposition), tractor sales in 2MFY13 recorded a robust growth of 2.8xYoY to 5,683 units while on MoM basis, sales for Aug’12 were up slightly by 1% to 2,885 units.
PSMC led the pack in Aug’12: PSMC sold 6,002 units in Aug’12, up 6.9%MoM, following higher sales of Mehran (+18% MoM) and Bolan (+13% MoM). Sales of INDU were relatively unchanged sequentially as higher Corolla sales (+14%MoM to 2800 units) made up for the fall in Coure and Hilux sales. HCAR was the contrarian underperformer in Aug’12, where sales of the company were down by 25%MoM to 1,241 units following discontinuation of Civic production ahead of the new ‘Civic’ model launch. Amongst the tractor manufacturers, MTL unit sales were up 44%MoM to 1,639 units while sales of AGTL were down by 28%MoM.