Karachi, September 18, 2013 (PPI-OT): FY13 Earnings to clock in at PKR 20.15/share, DPS at PKR 8 Arif Habib Limited previews the financial result for Kohat Cement Company Limited (KOHC), scheduled to be announced today.
According to Arif Habib Limited expect the company to post a massive 56% YoY earnings growth to PKR 2.6bn (EPS: PKR 20.15) in FY13. A strong 7% YoY dispatches growth coupled with a 12% YoY improvement in average retention prices remained the major contributors towards the 19% expected top line growth of the company.
This healthy top line growth, coupled with a 19% YoY drop in coal prices, is expected to have led to a 51% YoY jump in gross profit of the company to PKR 4.3bn. Consequently, gross margin is expected to have improved to 39% in FY13, compared to 31% a year back. Moreover, a steep 61% YoY drop is expected in the finance cost of the company, boosting the bottom-line further.
Arif Habib Limited expects the BoD to announce a cash dividend of PKR 8.0/share compared to PKR 3.0/share announced last year.
Financial Highlights PKR mn FY13 FY12 YoY Net Sales 11,086 9,316 19% Cost of Sales 6,767 6,464 5% Gross Profit 4,319 2,852 51% Selling Expenses 71 46 54% Administration Expenses 87 67 31% Operating Profit 4,161 2,739 52% Finance Cost 246 626 -61% Profit before tax 3,751 2,036 84% Profit after tax 2,594 1,661 56% EPS (PKR) 20.15 12.90 DPS (PKR) 8.0 3.0 167% Sources: Company Accounts and AHL Estimates
Taurus Securities Limited reiterates ‘Buy’ recommendation for the stock, with 53% upside potential from Arif Habib Limited DCF based target price of PKR 136/share. In addition to this sizeable upside potential of 53% from levels, the company stock is trading at a forward multiple of 4.7x while offering an adequate dividend yield of 9% at current levels. Encouragingly, KOHC remains immune from the recent power tariff hike due to a stay order of the court for Peshawar Electric Supply Corporation, which gives the company an edge over most of its sector rivals.