Daily Call

Cement, E&P, OMC, Fertilizer

October 6, 2023
Result Previews REP- 300

ACPL | POL | APL | EFERT BUY

ACPL: Net profit to climb up by 14x YoY during 1QFY24 Target Price 149.42
Attock Cement Pakistan Limited (ACPL) is scheduled to announce its financial result for
Last Closing 90.33
1QFY24 on 9th Oct’23, whereby we expect the company to post a massive growth in
Upside 65.4%
earnings of 14x YoY to PKR 1,604mn (EPS: PKR 11.67) compared to PKR 116mn (EPS:
PKR 0.84) in 1QFY23. The increase in profitability is attributed to a surge in other PSX Code ACPL

income, which is expected to swell up by 32x YoY given the gain on sale of the subsidiary Bloomberg Code ACPL PA
‘Saqr AL Keetan for Cement Production Company Limited’. The topline in 1QFY24 is
Relative Performance
projected to soar by 85% YoY to clock in at PKR 8,082mn vis-à-vis PKR 4,364mn in
ACPL KSE100 Index
SPLY, amid increase in retention price coupled with higher volumetric sales. Local 130%
dispatches depicted an upturn in 1QFY24 due to the drop in demand in last year amid 120%
floods. The gross margins are projected to climb by 364 bps YoY to settle at 20.5% in 110%
1QFY24, on the back of augmented cement prices in tandem with decline in coal prices. 100%
The finance cost is forecasted to increase to PKR 418mn vs PKR 82mn in SPLY as a 90%
result of higher borrowing cost. 80%
Exhibit: Financial Highlights 70%
(PKR mn) 1QFY24e 1QFY23a YoY 4QFY23a QoQ 60%

Apr-23
Oct-22

Oct-23
Nov-22
Dec-22

Aug-23

Sep-23
Jan-23

Jul-23
Jun-23
May-23
Mar-23
Feb-23
Net sales 8,082 4,364 85% 7,088 14%
Gross profit 1,656 735 125% 1,842 -10%
Other income 2,603 82 32x 152 17x Source (s): PSX, AHL Research
Finance cost 418 136 207% -18 nm
Muhammad Amad
PAT 1,604 116 14x 459 3.5x
muhammad.amad@arifhabibltd.com
EPS (PKR) 11.67 0.84 3.3
UAN: +92 21 111 245 111, Ext: 255
Source (s): Company Financials, AHL Research

POL: Bottom-line to ascend by 16% YoY during 1QFY24

BUY
Target Price 553.01
Pakistan Oilfields Limited (POL) is scheduled to announce its 1QFY24 financial result
on 9th Oct’23. We forecast the company to post earnings of PKR 9,708mn (EPS: PKR Last Closing 391.15
34.20/share) in 1QFY24 vis-à-vis PKR 8,400mn (EPS: PKR 29.59) in 1QFY23, depicting Upside 41.4%
a growth of 16% YoY. The growth in profitability is anticipated on account of the 23% PSX Code POL
YoY Pak Rupee devaluation against the greenback. However, the realized oil prices
Bloomberg Code POL PA
plummeted by 13% YoY. The company’s oil and gas production showcased a drop of
Relative Performance
8% and 3% YoY, respectively in 1QFY24. Furthermore, we expect exploration costs to
arrive at PKR 67mn, down by 99% YoY during 1QFY24 amid the absence of a dry well 140%
POL KSE100 Index

during the quarter compared to last year. On a QoQ basis, the net profit is projected to
showcase a massive jump of 66%, on the back of i) a hike in realized oil price by 6% 130%

QoQ, iii) an increase in oil production by 6% QoQ, iii) a weakening of PKR compared to 120%
USD by 2% QoQ, and iv) imposition of super tax charged during 4QFY23. Meanwhile,
the gas production remained stable on a QoQ basis. 110%

100%
Exhibit: Financial Highlights
(PKR mn) 1QFY24e 1QFY23a YoY 4QFY23a QoQ 90%
Oct-22

Oct-23
Apr-23
Nov-22
Dec-22

Aug-23

Sep-23
Jan-23

Jun-23
Jul-23
May-23
Mar-23
Feb-23

Net Sales 16,912 15,976 6% 15,081 12%

Operating Costs 3,267 2,109 55% 3,167 3%
Source (s): PSX, AHL Research
Gross Profit 11,217 11,589 -3% 11,287 -1%
Muhammad Iqbal Jawaid
Exploration Cost 67 4,526 -99% 390 -83%
iqbal.jawaid@arifhabibltd.com
Profit after Taxation 9,708 8,400 16% 5,864 66% UAN: +92 21 111 245 111, Ext: 248
EPS (PKR) 34.20 29.59 20.66

Source (s): Company Financials, AHL Research www.arifhabibltd.com

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 Daily Call
Cement, E&P, OMC, Fertilizer
October 6, 2023
Result Previews

APL: Earnings to jump up by 20% YoY in 1QFY24 BUY

Attock Petroleum Limited (APL) is scheduled to announce its 1QFY24 financial result on Target Price 398.20
9th Oct’23, where we expect the company’s PAT to arrive at PKR 5,129mn (EPS: PKR
Last Closing 298.74
41.23) compared to PKR 4,290mn (EPS: PKR 34.48), up by 20% YoY. Topline is
expected to grow by 11% YoY to PKR 137,941mn amid i) higher average retail price of Upside 33.3%
petroleum products, and ii) jump in MS and HSD volumes by 2% and 3% YoY. PSX Code APL
Meanwhile, FO volumes plunged by 25% YoY. Gross margins are expected to settle at
Bloomberg Code APL PA
8.15% in 1QFY24 vis-à-vis 8.06% in SPLY given higher inventory gains (~PKR 6bn)
during the period under review. On a sequential basis, the bottom line is anticipated to Relative Performance
witness a surge of 95% QoQ on account of absence of super tax, hefty inventory gains
APL KSE100 Index
during the quarter coupled with volumetric growth in petroleum products. The net sales 120%
of the company are expected to surge by 12% QoQ increase in product prices tagged
with 3% QoQ uptick overall petroleum products (MS and HSD up 4% and 5% QoQ,
respectively). 110%

Exhibit: Financial Highlights

100%
(PKR mn) 1QFY24e 1QFY23a YoY 4QFY23a QoQ
Net Sales 137,941 123,931 11% 123,103 12%
Gross Profit 11,241 9,991 13% 6,294 79% 90%

Apr-23
Oct-22

Oct-23
Aug-23

Sep-23
Nov-22
Dec-22

Jan-23

Jun-23
Jul-23
May-23
Mar-23
Feb-23
Gross Margins 8.15% 8.06% 5.11%
Finance Cost 710 487 46% 657 8%
Other Charges 484 471 3% 410 18% Source (s): PSX, AHL Research
Profit After Taxation 5,129 4,290 20% 2,625 95%
EPS (PKR) 41.23 34.48 21.09
Source (s): Company Financials, AHL Research

EFERT: Profitability expected to surge by 85% YoY in 3QCY23

Engro Fertilizer Limited (EFERT) is expected to disclose the financial result for 9MCY23 BUY
on 9th Oct’23, whereby we expect company’s net profit to arrive at PKR 13,218mn (EPS: Target Price 97.33
PKR 9.90), expanding by 38% YoY, which is on account of 13% YoY growth in urea offtake Last Closing 82.19
tagged with increase in urea prices by 45%. Meanwhile, DAP sales remained stable during Upside 18.4%
the period. On a quarterly basis, the profitability is expected to settle at PKR 7,754mn
PSX Code EFERT
(EPS: PKR 5.81), depicting a mammoth jump of 85% YoY. This hefty growth is mainly
Bloomberg Code EFERT PA
attributable to massive surge in urea and DAP sales of 63% and 58% YoY, respectively
followed by hike in urea by 48%. Gross margins are forecasted to settle at 32.26% in Relative Performance
3QCY23 vis-à-vis 27.29% in SPLY higher sales volumes of urea. Furthermore, finance
EFERT KSE100 Index
costs are expected to swell up by 2x YoY given higher interest rates and short term 130%
borrowings. Other income is anticipated to grow by 36% YoY, owed to higher income from
cash and cash balances. Alongside the result, we expect the company to announce a cash 120%

dividend of PKR 4.00/share (PKR 10.50/share in 9MCY23).

110%

Exhibit: Financial Highlights

100%
(PKR mn) 9MCY23e 9MCY22a YoY 3QCY23e 3QCY22a YoY QoQ
Net Sales 147,161 110,876 33% 64,794 35,739 81% 69% 90%
Apr-23
Oct-22

Oct-23
Nov-22
Dec-22

Aug-23

Sep-23
Jan-23

May-23

Jun-23
Jul-23
Mar-23
Feb-23

Gross Profit 43,102 32,304 33% 20,902 9,752 114% 83%

Other Income 1,442 1,304 11% 278 205 36% -38%
Source (s): PSX, AHL Research
Finance Cost 2,506 1,640 53% 1,368 582 135% 95%
Muhammad Iqbal Jawaid
PAT 13,218 9,595 38% 7,754 4,182 85% 632%
iqbal.jawaid@arifhabibltd.com
EPS (PKR) 9.90 7.19 5.81 3.13 UAN: +92 21 111 245 111, Ext: 248
DPS (PKR) 10.50 8.50 4.00 3.00
Source (s): Company Financials, AHL Research
www.arifhabibltd.com
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 Daily Call
Cement, E&P, OMC, Fertilizer
October 6, 2023
Result Previews

Analyst Certification: The research analyst(s) is (are) principally responsible for the preparation of this report. The views expressed in this research report accurately reflect the
personal views of the analyst(s) about the subject security (ies) or sector (or economy), and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. In addition, we currently do not have any interest (financial or
otherwise) in the subject security (ies). Furthermore, compensation of the Analyst(s) is not determined nor based on any other service(s) that AHL is offering. Analyst(s) are not
subject to the supervision or control of any employee of AHL’s non-research departments, and no personal engaged in providing non-research services have any influence or
control over the compensatory evaluation of the Analyst(s).

Equity Research Ratings

Arif Habib Limited (AHL) uses three rating categories, depending upon return form the current market price, with the Target period as June 2024 for Target Price. In addition,
return excludes all type of taxes. For more details, kindly refer the following table;

Rating Description
BUY Upside of subject security(ies) is more than +15% from last closing of market price(s)
HOLD Upside of subject security(ies) is between -15% and +15% from last closing of market price(s)
SELL Upside of subject security(ies) is less than -15% from last closing of market price(s)

Equity Valuation Methodology

AHL Research uses the following valuation technique(s) to arrive at the period end target prices;
➢ Discounted Cash Flow (DCF)
➢ Dividend Discount Model (DDM)
➢ Sum of the Parts (SoTP)
➢ Justified Price to Book (JPTB)
➢ Reserved Base Valuation (RBV)

Risks
The following risks may potentially impact our valuations of subject security (ies);
➢ Market risk
➢ Interest Rate Risk
➢ Exchange Rate (Currency) Risk

Disclaimer: This document has been prepared by Research analysts at Arif Habib Limited (AHL). This document does not constitute an offer or solicitation for the purchase or
sale of any security. This publication is intended only for distribution to the clients of the Company who are assumed to be reasonably sophisticated investors that understand
the risks involved in investing in equity securities. The information contained herein is based upon publicly available data and sources believed to be reliable. While every care
was taken to ensure accuracy and objectivity, AHL does not represent that it is accurate or complete and it should not be relied on as such. In particular, the report takes no
account of the investment objectives, financial situation and particular needs of investors. The information given in this document is as of the date of this report and there can
be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. AHL reserves the right to
make modifications and alterations to this statement as may be required from time to time. However, AHL is under no obligation to update or keep the information current. AHL
is committed to providing independent and transparent recommendation to its client and would be happy to provide any information in response to specific client queries. Past
performance is not necessarily a guide to future performance. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis
for any investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems
necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should
consult his or her own advisors to determine the merits and risks of such investment. AHL or any of its affiliates shall not be in any way responsible for any loss or damage that
may be arise to any person from any inadvertent error in the information contained in this report.

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