Meezan Bank profit for 2015 up by 10 percent

Pakistan’s first full service Islamic bank, Meezan Bank, posted earnings of Rs5 billion for the year ended 31^st December 2015, up 9.9% from the profit of Rs4.5 billion recorded in the preceding year. Along with the approval of financial accounts, the Board of Directors gave nodded distribution of 12.5 percent final dividend among the shareholders. This is in addition to an interim dividend of 17.5 percent paid earlier, taking the full year payment to 30 percent.

The increase in the bank's profitability is attributable to improved net spread after provisions. The net mark up income after provisions was stated at Rs17.6 billion, up 36.8% from a year ago. The expansion in its spread was mainly on the back of a significant increase in the profit earned on Islamic financing, investments and placements. It rose almost 15% YoY to Rs33.1 billion at the end of 2015. In contrast, other income of Meezan Bank registered a YoY decline in 2015, hurting its bottom line. It amounted to Rs4.6 billion, down 3.3% from a year ago. The major reason for the decrease in other income was the drop of 70.2% in the net gain on sale of securities in 2015. In addition, the bank's income from dealing in foreign currencies also decreased by 9.5% to Rs1.4 billion.

Oil glut has been created with a purpose

In one of my previous blogs I raised a point that western media often mislead. I have a strong feeling that like any third world country news are produced on the behest of lobbying firms. These lobbying firms often call their work ‘Policy Advocacy’. These entities work for protecting the interest of Fortune-50 and Fortune-500 companies and not the consumers or public at large.

My perception gets further strength when I go through the reports of mainstream media regarding the prevailing oil glut. These media companies paint a scenario that if oil price goes further down, the entire global economy would plunge in serious crisis. There would be many bankruptcies and for saving the oil and gas exploration and production companies crude price must be hiked.

These companies had made tons of money through connivance. This game was started by the US companies and Saudi Arabia and other oil producing countries were trapped. They lived under the false impression that inflow of petro-dollars was on the rise and totally ignored the fact that one the US attains self sufficiency in oil production, it would gradually deprive all other oil countries from oil income.

Interestingly, the US has plunged oil prices to present lows to inflict material injury to all the oil producing countries, Saudi Arabia, Russia and Iran being the prime targets. It is stunning that Russia and Saudi Arabia are fighting a proxy war in Syria but have joined hands to convince OPEC and non-OPEC members that their survival was in cutting down production.

This brings to mind an old saving that enemy of an enemy can be made friend. Saudis very strongly believe that the US has betrayed them with regards to Syria and Iran. Russia has established its nuisance value in the Middle East and its policy makers strongly believe that by joining hands with Saudi Arabia they can achieve twin objectives, weakening the US influence on countries located in Arabia Peninsula and pushing many of the US oil producing companies out of business.

Ironic is the attitude of oil consuming countries, which feel helpless before these exploiters. They are also falling victim of the disinformation being spread by the western media.  These countries have been made to believe that economic downturn in the US would also affect their economies adversely.

Since I live in Pakistan and following this issue to some extent, the incumbent government has failed in passing the benefit of low oil prices to the masses. Following IMF mantra the government has increased percentage of tax on energy products to overcome budget deficit. I am sure Pakistan is not the only countries following IMF recipe blindly but all those countries that live on the crutches of IMF are following the same policy blindly.

Pakistan has failed in benefiting from the GSP plus status granted to the country by the European Union only because of prevailing energy crisis. I would say it very loudly that energy crisis in Pakistan is not due to the shortage of energy products but blatant theft, gross inefficiencies and above all massive corruption.

In the third world rulers are installed and toppled in the name of ‘regime change’. It is simple that once an agent becomes redundant it is eliminated, assassinations are common but portrayed as act of rebels or an act of God.

Explosion of aero plane of Pakistan’s President Ziaul Haq was not an accident but outright killing. Those who died along with Zia included the US Ambassador to Pakistan, a Brigadier General of the US Army and many generals of Pakistan Army, who had played key role in defeating USSR in Afghanistan.

 

Engro Corp posts Rs17.3 billion net profit

Engro Corporation has released its financial results for the year ended 31st December 2015. The Board of Directors approved payment of 70 percent final dividend, taking full year payout to 180 percent. The announcement was a pleasant surprise for the investors in stock market, which is going through bearish spell lately.

Engro’s Corp’s profit after tax grew by almost 122 per cent to Rs17.3 billion (EPS: Rs26.32) for the year under review as compared to net profit of Rs7.8 billion (EPS: Rs13.59) earned last year.

Engro Fertilizers continued to be the chief contributor towards the profitability, recording net profit of Rs15 billion (EPS: Rs11.28) for the year 2015 due to availability of concessionary gas and inclusion of DAP in total sales.

Earnings of Engro Foods were recorded at Rs3.2 billion (EPS: Rs4.13) as compared to Rs0.8 billion (EPS: Rs1.16) last year. This growth was on account of volumetric expansion leading to a higher market share in the dairy segment coupled with margin accretion.

The chemical business, however, managed to keep its losses in-check by posting consolidated loss after tax of Rs0.6 billion.

In a stock filing, Engro Corp informed that it had appointed advisers for the potential sale of up to 24 percent holding in Engro Fertilizer through private offering to local and international investors subject to the approval of shareholders.

 

HUBCO declares higher than expected dividend

Pakistan’s second largest independent power producer (IPP), Hub Power Company (HUBCO ) has announced its half yearly financial results for the period ended 31st December 2015. The entity has reported profit Rs5.3 billion (EPS: Rs4.59) attributable to holding company for the consolidated entity, posting 2%YoYdecline.

Profit for the quarter was reported Rs2.7 billion (EPS: Rs2.38), down 10%YoY but up 8%QoQ. With earnings resting within estimates, interim dividend payout of 45 percent was higher than the expectations. Higher profit can be attributed to Rs1.1 billion (EPS: Rs0.69) income from Laraib, up by 19%YoY.

Half yearly results reflect: 1) a 38%YoY reduction in turnover due to persisting fall in furnace oil price (45%YoY decline), 2) operating costs down by 42%YoY (majorly through falling input costs), 3) General and Admin expenses (rising 148%YoY) reflect expenses arising from headway on new ventures, and 4) financial costs sliding 33%YoY.

Being indicative of margin improvements from falling input prices, HUBCO results point to a rise in spending on account of new ventures, with accompanying losses being recognized in the consolidated accounts. Moreover, higher load factors failed to dent profits following the completed overhaul of the base plant, while diversification (income from Laraib) continues to support healthy payouts. 

EFU General Insurace full year profit exceeds Rs4 billion

The Board of Directors of EFU General Insurance approved financial accounts, payment of 45 percent final dividend and issue 25 percent bonus shares for the year 2015. The company had already paid 30 percent interim dividend, which will take full year payout to 75 percent.
For the year ended 31^st December 2015 the company has posted profit after tax of Rs4,033 million (EPS: Rs25.21) as compared to profit of Rs1,829 million (EPS: Rs11.43), an increase of 120 percent.
This excellent performance can be attributed to a number of factors that include: 1) underwriting income rising to Rs1,533 million from Rs1,316 million, 2) investment income increasing to Rs1,202 million from Rs914 million and 3) reversal of provision for impairment of an associate company amounting to Rs1,987 million.

ODGC profit declines by 28.5 percent

Pakistan’s largest exploration and production enterprise, Oil & Gas Development Company (OGDC) has released its half yearly financial results for the period ended 31st December 2015. OGDC profit eroded by 28.5 per cent but the Board of Directors was generous enough in approving payment of second interim dividend of 12 percent, taking payment during first half to 27 percent.

OGDC has posted profit after tax of Rs34.206 billion (EPS: Rs7.95) during the period under review as compared to net profit of Rs47.828 billion (EPS: Rs11.12) for the corresponding period a year ago, down by 28.5 percent.

Net sales of OGDC plunged to Rs86.186 billion during July-December 2015 from Rs118.64 billion during the same period 2014, a decline of 27.35 percent.

OGDC has presence in the four provinces, largest portfolio of hydrocarbon reserves – 59 percent of oil and 36 percent of gas as at 30th June 2015.

OGDC’s average daily production is 40,028 barrel oil, 1,116mmcf gas, 312tons LPG and 28 tons Sulphur. It contributed 28 percent to total gas and 48 percent to crude oil production

PSO posts 57 percent increase in profit after tax

On Tuesday, Pakistan’s largest oil marketing company, Pakistan State Oil Company Limited (PSO) released its half yearly results and also announce approval of 50 percent dividend by the Board of Directors. The results were above market expectations.

PSO has posted profit after tax of Rs6.7 billion (EPS: Rs24.76) for the half year ended 31^st December 2015 as compared to profit of Rs4.2 billion (EPS: Rs15.76) for the corresponding period of 2014, an increase of 57 percent.

The major takeaways are: 1) reduction in financial cost to Rs3.6 billion from Rs5.9 billion, may be because of improved cash flow and declining interest rates, 2) increase in share of profit of associates rising to Rs388 million from Rs23 million and 3) other income also went down to Rs5.3 billion from Rs6.7 billion.

Net sales of the company declined by over 30 percent to Rs353.9 billion from Rs508.2 billion. This erosion can be attributed to the declining trend in international prices of crude oil, also affecting prices of POL products being dispensed by PSO.