Elixir Securities Limited – Flash Note

Karachi, October 19, 2017 (PPI-OT): Attock Petroleum Limited – Result Review – Inventory Gains Propel 1QFY18 EPS to PKR16.04/share

Attock Petroleum Limited (APL) reported its 1QFY18 results today, with profits clocking in PKR1.3bn (PKR16.04/share), up 41% sequentially but down 15% YoY.

The reported earnings are higher than our estimates. We attribute the earnings surprise to higher inventory gains as can be ascertained from gross margins of 5% during the outgoing quarter as compared to 4% in 4QFY17.

Against SPLY, the company’s 1QFY18 results clocked in lower due to higher inventory gains in the comparable period. This can be ascertained from GM attrition of 2ppt in the outgoing quarter as compared to GM in 1QFY17.

The company’s effective tax rate clocked in at 27% during 1QFY18 against 29% SPLY while other charges marked a decline of 41% YoY (as compared to 18% YoY decline in PBT less Other Charges) as the company abolished the booking of Workers Welfare Fund (WWF).

We maintain APL as our top pick from the sector with a Buy call on the scrip based on our Jun-18 PT of PKR751/share offering capital upside of 28% and dividend yield of 10% against last day’s closing price.


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