AKD Securities Limited – Off the Analyst’s Desk (16-10-2019)

Karachi, October 16, 2019 (PPI-OT): APL: 1QFY20 EPS clocked in at PkR12.3 – Above expectations

Attock Petroleum Limited (APL) announced results for 1QFY20 where company posted PAT of PkR1.2bn (EPS: PkR12.3) down 22/21% QoQ/YoY, as lower inventory gains and volumes declining by 1/12% QoQ/YoY dragged the overall results.

Company recorded inventory gains of PkR103mn for the quarter against our expectation of inventory losses of PkR384mn which can be attributed to higher procurement in early part of the quarter.

Effective tax rate for the quarter clocked in at 30% vs. 34% expected as higher profitability made corporate tax rate applicable against our expectation of turnover tax rate being applied.

Among other things, operating expenses decreased by 48/8%QoQ/YoY which we believe is a function of lower sales volumes while the significant decline on QoQ basis was also because of lower exchange losses.

APL is our top pick from the sector where, with FY20F EPS at PkR43.2, the stock is currently trading at FY20 P/E of 6.8x.

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