IGI Securities Limited – Day Break

Karachi, August 09, 2018 (PPI-OT): Oil and Gas Marketing Companies – OMC Sector Earnings to drop by 18%YoY in 4QFY18

IGI OMC universe earnings are expected to decline by 18%YoY in 4QFY18 to PKR 4.42bn compared to PKR 5.42bn in the same period last year.

We expect PSO to post earnings of PKR 2.74bn (EPS PKR 8.39) down by 33%YoY compared to PKR 4.07bn (EPS PKR 12.48) in the same period last year. This brings FY18 earnings to PKR 15.96bn (EPS PKR 48.95) down by 15%YoY.

We estimate APL to register earnings of PKR 1.18bn (EPS PKR 14.17) up by +25%YoY compared to PKR 0.94bn (EPS PKR 11.33) in the same period last year. This brings FY18 earning to PKR 5.44bn (EPS PKR 65.58) up by +7%YoY.

We forecast HASCOL to record profitability of PKR 513mn (EPS PKR 3.54) up by +24%YoY compared to PKR 414mn (EPS PKR 2.86) in the same period last year. This bring total 1HCY18 earnings to PKR 1.24bn (EPS PKR 8.58) up by +57%YoY.

We maintain ‘BUY’ call on PSO/HASCOL/APL with our Dec-18 target price of PKR 383.5/share/ PKR 688.1share/ PKR 350.9/share offering +15%/+22%/+13% upside from last close. PSO and APL are trading at FY18 P/E of 5.8x and 8.2x, respectively.