PakStox Outlook

In today's emergent meeting the Monetary Policy Committee (MPC) of The State Bank of Pakistan increased Policy rate by 300bps to 20%. Taking it to its highest ever. Also, today, the exchange rate deteriorated further and Pak-Rupee declined a massive 6.6% to Rs. 285 to a dollar.  And despite meeting the conditions, the IMF deal remains elusive as the IMF management continuously shifts goal posts for Pakistan. The market now shows total lack of confidence in policy measures.  Indicating worsening situation MPC stated that the recent fiscal adjustments and exchange rate depreciation have led to a significant deterioration in the near term inflation outlook and a further upward drift in inflation expectations. MPC candidly observed that despite recent improvement in CAD, scheduled debt repayments and a decline in financial inflows amid rising global interest rates and domestic uncertainties, continue to exert pressure on FX reserves and the exchange rate.  The statement cou...

Over $2 trillion lost in market cap in under 24 hours in US stocks and cryptos.  SVB Financial Group (SVB) reassure clients, after a capital raise caused a steep 60% collapse in its share value. Silicon Valley Bank could mark the 2nd largest bank failure in U.S. history. Bitcoin broke below $20,000.

NRL: 2nd Quarter Earning Release - Period ending December 2022 Another loss making quarter for National Refinery. NRL announced a loss of Rs. 14 per share in the 2nd quarter, adding loss in the first quarter of  Rs. 55 Half yearly loss to Rs. 68.58. A number of factors, such as fluctuating demand, exchange rate, and crude prices make National Refinery (NRL) earning very volatile. In this half year NRL faced added difficulty - and higher charges - on opening Letters of Credit (LCs) for import of Crude Oil, as Pakistan faced foreign exchange crunch. Very high inflation and high interest rates also made the matters worse. In the Half Year ending 31 Dec 2022, NRL incurred loss after tax of Rs. 5,484 million (loss per share of Rs. 68.58) as compared to profit after tax of Rs. 2,550 million (EPS of Rs. 31.9)in the corresponding period last year. In this HY period crude oil prices in international market gradually decreased from approximately US $110/barrel in July-2022 to US $80/barrel i...

HUBC: 2nd Quarter Earning Release - Period Ending 31 Dec 2022 EPS (2ndQ):  Rs. 8.72 -  Up one and a half times over last quarter. HUBC Announced a cash Dividend of Rs. 5.75 for the 2nd quarter. This is in addition to a hefty cash dividend of Rs. 15.5 paid in the first quarter. This takes this Power Producers ttm yield to over 30%. Don't expect a repeat though. Profit after Tax (Un-Consolidated) for the 2nd quarter was Rs 11.3 billion, increasing 1.5 times over first quarter. The increase in the profit after tax was primarily from 'other income' of Rs 8.2 billion. Gross profit for the quarter was just Rs. 6 billion declining 5.6% compared to first quarter ending September 2022. EBIT rose 100% boosted by other income. Financial cost saw quarterly increase of 4%.

AIRLINK: 2nd Quarter Earning Release, Period Ending 31 Dec 2022.   EPS (2ndQ):  Rs. 0.88 - Up 6.6% over last quarter.  No cash or Stock Dividend. The increase of 6.6% in the Profit after taxation over the Ist quarter was mainly due to  tax reversal . The Profit before tax in fact declined by 4.8%, and Operating Profit declined by 6.8%, nullifying 6% increase in Revenues and 7.7% increase in Gross Profit.  Nonetheless increase in Revenues and Gross Profit is a positive sign. In this quarter Airlink must have faced 'impediments in availability of Mobile  Phones CBU and SKD Materials', as it did in the last quarter. Interim financial Reports are reported un-audited. T here appear to be  substantial differences between interim results reported in September 2022 and December 2022. 

HBL announced Financial Results for the Year Ending 31 Dec 2022. Cash Dividend: Rs. 1.5 per share. This is in addition to Rs. 5.25 already paid. Making a total of Rs. 6.75/share for the whole year. EPS (Year 2022) Rs. 23.23 (last year Rs. 23.88). Profit after Tax (Year 2022): Rs. 34.4 billion, down 3% over last year of PAT of Rs. 35.5 billion. Profit before tax had increased over 24% but higher income tax at 55% ( last year 43%) impacted the bottom line negatively. HBL Net Interest Income had also boosted by 26%. In addition 269% increase in 'Foreign Exchange Income' (Int) was nullified by higher income tax rate.

Fauji Cement:  On its way to become the third largest cement company. Has 3 plant locations. The recent addition of 2mn tons at Nizampur has taken the capacity to 8.4mn tons. Planned expansion at Dera Ghazi Khan of 2mn tons, is expected to commence operations by CY23 end. CapEx is estimated at Rs38bn financed with a Debt: Rs23bn & Equity: Rs15bn. Major portion with debt under TERF and LTFF arrangements. FCCL could only manage to secure Rs4bn under TERF and it will now not be able to avail LTFF rates for the upcoming expansion. This will have an impact of Rs800mn.  40% of the equipment import is remaining. FCCL fuel mix for 1HFY23: Afghan coal being 44% ,local coal  at 52-53% in the coal mix. Afghan coal prices are  around Rs52-55k/ton, while local coal is at Rs33-35k/ton. Landed cost for imported coal comes to around Rs60-62k/ton. current coal cost ia around Rs42-43k/ton compared to around Rs 38k/ton in 2QFY23. More at:  FCCL - Stock quote Pakistan Stock Ex...