In Focus: Result Review of PPL&LUCK 1Q09 (10112008)

PPL Result Review 1Q09
PPL posted astonishing YoY growth of 68.1 percent in bottom line earnings of 1Q09 result as PAT witnessed an increase from Rs4.8bn to Rs7.8bn. Further, EPS of the company has increased to Rs9.36 from Rs5.79 in corresponding period last year. Moreover, company has marked ever high revenue of Rs15.8bn in one quarter resulting in increase of 53 percent over same period last year.
Key drivers for the growth in bottom line earnings were i) 59.8 percent increase in crude oil prices on YoY basis, ii) average increase of 20 percent increase in well head gas prices of Sui, Kandkhot, Sawn and Miano during the second half of last year these fields accounts 90 percent of total the company gas production and iii) Pak rupee averagely deprecated by 19.4 against dollar has further support earning of the company. As oil revenue of E&P stocks are realised in $ per barrel.
Lucky Result Review 1Q09
Lucky cement showed a surprisingly positive result for 1Q09 where company's earnings sharply rose by 31.8 percent to Rs2.98 per share due to the diving gross margins on the back of higher local cement prices and increased export revenues resulting from significant devaluation in Pak rupee against US dollar..
Luck earnings derived by higher retention prices with controlled cost
Luck's 1Q09 earning were driven by 13.1 percent expansion in gross margins as the company has managed to sustain higher cement prices. Net retention prices increased by 73 percent YoY to (Rs231.33/bag) in 1Q09 on the back of 73 percent increase in local prices and 53 percent increase in export price in rupee term given that the Pak Rupee devalue against US$ in the last year by 30 percent. On the other hand, cost of production went up by a significantly lower amount, rising by only 40 percent YoY. During QoQ retention prices sharply increased by 49 percent while cost of good sold per ton increased by 16 percent as coal prices reduced by 43 percent from its peak in Jul 08, which has put off the pressure on cost.
Other expenses, finance and distribution cost showed massive upsurge
Other operating expenses of the company showed massive upsurge by 778 percent as company booked heavy exchange losses on US$ loan swapped. However, company has swapped out of this agreement in mid of this quarter. Distribution cost of the company also showed a huge increase of 100 percent on the account of export expenses on the transportation of the cement. Financial charges of the company were also up by 108 percent on the back of increase in short term borrowing to Rs 5.88bn from Rs 3.09 bn in 1Q08.