AKD Quotidian about — EFOODS and LOTPTA CY12 Result Previews

Karachi, January 22, 2013 (PPI-OT):  EFOODS is scheduled to announce its full year CY12 results on Jan 24’13.

According to AKD Securities expects the company to post NPAT of PKR 2,391 million (EPS: PKR 3.15) in CY12, up by a substantial 168%YoY, fuelled by 35%YoY growth in revenues, 3 ppt YoY expansion in gross margins and 14%YoY decline in financial charges. For 4QCY12, AKD Securities expects earnings to bounce back, jumping by 29%QoQ to PKR 773 million (EPS: PKR 1.02), the highest ever quarterly earnings to date. Higher milk prices will be the primary earnings driver for 4QCY12 where AKD Securities expects the company to post 12%QoQ topline growth to PKR 10,811 million while gross margins are also expected to improve by 90bps QoQ to 26.4%, even as seasonal lull in Ice Cream sales will slightly weigh down profitability in 4QCY12. AKD Securities does not expect any dividend payout with the result. At current levels AKD Securities has a Neutral stance on EFOODS, which is trading near AKD Securities’ Dec’13 end Target Price of PKR 98/share.

EFOODS: CY12 Result Preview

(PKR million)CY12FYoY4QCY12EQoQ
Net sales

40,207

35%

10,811

12%

Gross profit

10,150

53%

2,853

16%

S and A expense

5,574

32%

1,400

8%

Operating profit

4,577

90%

1,453

25%

Financial charges

901

-14%

224

-5%

PBT

3,622

166%

1,189

33%

PAT

2,391

168%

773

29%

EPS (PKR @760 million share)

3.15

1.02

Source: AKD Research

LOTPTA will announce its CY12 result on Jan 28’13. On an unconsolidated basis, AKD Securities forecasts LOTPTA to post NLAT of PKR 592 million (LPS: 0.39) in CY12 compared with a NPAT of PKR 4,178 million (EPS: PKR 2.76) in CY11. Earnings decline is largely due to sharp fall in PTA-Px primary margins (-US$150/ton YoY), exacerbated by the PKR volatility. For 4QCY12, earnings will remain downbeat where AKD Securities expects sequential loss to expand by 32% to PKR 169 million (LPS: PKR 0.11). Regional PTA-Px primary margins in 4QCY12 have further compressed to US$68/ton compared with US$82/ton in 3QCY12 on 9%QoQ rise in Px prices. However, investors should keep a look out for consolidated results, which will reflect energy efficiency gains from the recently commissioned co-generation power plant where AKD Securities estimates approximate energy savings of ~ PKR 150 million in 4QCY12, translating into an EPS impact of PKR O.06. Similarly, consolidated loss for 4QCY12 may reduce to PKR 72 million (LPS: PKR 0.05). LOTPTA offers 8% upside to AKD Securities’ Dec’13 end TP of PKR 7.3/share. Accumulate.

LOTPTA: CY12 Result Preview

(PKR million)CY12FYoY4QCY12EQoQ
Net sales

54,053

-6%

13,972

3%

Gross profit

(344)

nm

(108)

73%

S and A expense

457

-13%

117

22%

Financial charges

261

12%

104

0%

Other income

365

-55%

68

-1%

NPAT

(592)

nm

(169)

32%

EPS (PKR)

(0.39)

(0.11)

Source: Company Reports, AKD Research

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