AKD Quotidian about — PTC: Result Preview

Karachi, February 07, 2013 (PPI-OT): PTC is scheduled to announce its results for period ending Dec 31’12 on Feb 13’13.

According to AKD Securities, recall, PTC has changed its reporting year end to December from June previously. AKD Securities expects the company to post bumper earnings in 4QCY12 with consolidated NPAT estimated to stand at PKR 6.2bn (EPS: PKR 1.22), taking full year CY12 profitability to PKR 4.8bn (EPS: PKR 0.94), markedly tower than CY11 earnings (NPAT: PKR 7.2bn, EPS: PKR 1.41), largely due to PKR 11bn VSS related expense, incurred in 3QCY12. Sharp reversal in 4QCY12 earning will be consequent to significant growth in international call termination rates (aka ICH). In this regard, AKD Securities forecasts PTC’s consolidated earnings to stand at PKR 6.2bn (EPS: PKR 1.22) in 4QCY12, compared to NLAT of PKR 8.3bn (LPS: PKR 1.62) in 3QCY12. AKD Securities expects revenues from int’l operations to surge to PKR 6.2bn (EPS impact of PKR 0.79) following increase in ASR to USc8.9/min from ~USc1.25/min previously. The company could also potentially surprise with a one-off tax reversal of its PKR 11bn VSS expense (EPS impact of PKR 0.75), which could result in the company posting 4QCY12 NPAT of PKR 10.1bn (EPS: result in the company posting 4QCY12 NPAT of PKR 10.1bn (EPS: PKR 1.98), taking full year CY12 earnings to PKR 8.6bn (EPS: PKR 1.69), 20% higher than CY11 earnings. AKD Securities does not rule out the possibility of a final cash dividend of PKR 1.0/share- PKR 1.25/share with the result. PTC is AKD Securities’ conviction pick for CY13 and AKD Securities recommends `Buy with a Target Price of PKR 37.7/share.

HBL: CY12 Result Preview

Habib Bank Ltd (HBL) is scheduled to announce its CY12 result on Tuesday Feb 12’13. On a consolidated basis, AKD Securities expects HBL to post NPAT of PKR 22.85bn (EPS: PKR 18.85) in CY12 vs. NPAT of PKR 22.19bn (EPS: PKR 18.30) in CY11, translating into marginal 3%YoY growth. Alongside the result, AKD Securities expects HBL to announce a final cash dividend of PKR 4/share to bring full-year CY12 payout to PKR 7.5/share (payout ratio: 40%). While MCR requirements have been met and the bank faces prospects of trimmer ROE going forward, AKD Securities believes the BoD may also decide to announce a 10% bonus issue. Key highlights for upcoming CY12 results are expected to be 1) flattish NII with balance sheet growth countering NIM compression, 2) a 31%YoY reduction in provisions, 3) modest 7%YoY non-interest income growth with higher capital gains countered by lower fx income and 4) contained 6%YoY increase in non-interest expenses. In 4QCY12, AKD Securities expects HBL to post NPAT of PKR 5.6bn (EPS: PKR 4.64), down 13%YoY on lower NIMs but up by 2%QoQ. Regarding the latter, sequential growth may emanate from higher non-interest income and potentially a lower effective tax rate in 4QCY12 (effective tax rate is a high 38% in 9MCY12). At current levels, HBL trades at a CY13F P/B of 1.05x and P/E of 6.6x where AKD Securities’ target price of PKR 123/share implies a Neutral stance. That said, AKD Securities will look to revisit AKD Securities’ investment case for HBL post release of CY12 results.

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