USAID and PBIT sign

memorandum of understanding

Lahore (staff Reporter): At a ceremony held in Lahore, USAID and the Punjab Board of Investment and Trade (PBIT) signed a memorandum of understanding to promote Punjab as a desirable destination for investment in agriculture. “The MoU signed today highlights USAID’s commitment to developing the agriculture sector in Punjab. Through this partnership, USAID and PBIT will work together in promoting investment and creating jobs in the livestock, dairy and horticulture sectors,” USAID Provincial Director for Punjab Dr. Miles Toder remarked. “The combination of USAID and PBIT resources will help stimulate the business enabling environment in the province, which will help overcome investment and trade challenges.”

Through this memorandum, the USAID-funded Punjab Enabling Environment Project (PEEP) and PBIT will promote investment opportunities for joint ventures, advocate for public-private partnerships emerging from the Government of Punjab’s agricultural initiatives, and highlight trade and investment areas for international and domestic investors.

Speaking at the ceremony, PBIT CEO Ms. Amena Cheema said, “Punjab is Pakistan’s agricultural heartland and offers tremendous opportunities for investments in sectors such as livestock, dairy and horticulture.”

USAID’s Punjab Enabling Environment Project is a five-year, $15 million project to improve the business environment in the livestock, dairy and horticulture sectors of Punjab.

Punjab Board of Investment and Trade (PBIT) is the Government of Punjab’s premier body to facilitate and support trade and investment in the province.

Lucky Cement announces 2QFY16 earnings of Rs3.9b

Lahore (Staff Reporter): Lucky Cement announced consolidated 2QFY16 earnings of Rs3.9b (EPS Rs12.0), up 15% YoY. This result was in-line with market estimates. LUCK’s consolidated revenues remained almost flat at Rs21bn in 2QFY16. This was primarily due to lower revenues (down 22%) posted by the Polyester segment of ICI Pakistan (ICI), subsidiary of LUCK. Polyester revenues declined owing to downward correction in prices across the petrochemical chain. However, on standalone basis, revenues from cement operations grew 5% YoY in 2QFY16, led by 2% volumetric growth. Local dispatches were up 28% YoY to 1.3mn tons however, exports fell 31% YoY to 0.4mn tons.

on the back of 1) anti-dumping duty imposed by South Africa (SA), and 2) regional currency devaluation.

Consolidated gross margin were up 259bps YoY to 33% in 2QFY16, supported by 1) improvement in ICI’s gross margin, up 91bps YoY on the back of installation of coal fired turbine system and 2) 297bps YoY increase in cement operations’ gross margin owing to lower fuel and power costs.

LUCK’s consolidated earnings grew 15% YoY to Rs3.9bn in 2QFY16, while on standalone basis earnings grew 12% to Rs3.3bn. LUCK’s Iraq Joint Venture (JV) contributed ~4% (Rs0.5/share) to its consolidated bottom-line, while 10% contribution (~Rs1.2/share) came from ICI, we believe.

In 1HFY16, consolidated revenues were down 2% YoY (standalone revenues up 2% YoY), while consolidated earnings were up 14% YoY (standalone earnings up 12% YoY).

Key risks to our investment thesis include 1) substantial decline in exports, 2) cartel breakdown, 3) unanticipated increase in gas price, 4) delay in start of mega projects, and 5) headwind in the ongoing installation of cement plant by LUCK through JV in Congo.

Meezan Bank announces 4Q2015 earnings of Rs1b

LAHORE (Staff Reporter): MEBL announced 4Q2015 earnings of Rs1.0bn (EPS Rs1.1) as against Rs992mn (EPS Rs1.0) in the same period last year. The bank also announced final cash dividend of Rs1.25/share, in addition to interim dividend of Rs1.75/share. The result remained in-line with expectations. Net spread earned by MEBL increased by 15% YoY to Rs4.3bn in 4Q2015 led by strong volumetric growth in deposits and lower cost of deposits. Recoveries in non-performing Islamic financing led to a major decline in provisioning expense that went down by 94% to Rs30mn.  Improvement in Net spread earned and lower provisioning expense offset lower other income and other expense during the quarter.

Other income was down 14% to Rs1.1bn largely due to lower capital gains which declined to Rs53mn in 4Q2015 vs. Rs377mn in the corresponding period last year.

Other expenses of the bank grew by 21% to Rs3.8bn mainly due to aggressive branch expansion during the year, we believe. MEBL has already added 66 branches in 9M2015 taking total branch network to 494 branches.

On QoQ basis, earnings were down 15% due to 7% decline in other income and 12% increase in other expense. Net spread earned was up 2% QoQ.  In 2015, earnings grew by 10% to Rs5.0bn (EPS Rs5.0) led by 36% increase in Net spread earned.

Experts flag 1) absence of adequate Shariah compliant investment opportunities, 2) declining interest rates and 3) increasing competition from conventional banks entering Islamic banking, as key risks for MEBL.

Descon Chemical announces Rs350 million profit

Lahore (Staff Reporter): Board of Director of Descon Chemicals Limited has announced financial results for half year ended 31st December 2015. The company has announced total profit of Rs. 35 crore for half year ending 31st December 2015 compared to a loss of Rs. 51 crore in the corresponding period of 2014. The company announced EPS of 16 paisa compared to a LPS of 28 paisa in the same period of last financial year. On quarterly basis company has announced 12 paisa profit per share for quarter ending 31st December 2015 compared to a loss of 18 paisa per share in corresponding period of 2014. The majority shareholding of the company has been transferred to Nimir Management Pvt Ltd.

, a subsidiary of Nimir Chemicals Limited.

The company also informed PSX that new shareholders of the company have injected considerable amount of funds in the company, which were used to repay the bank liabilities. As a result the balance sheet of the company improved significantly and long term loan of the company stands nil as of 31st December 2015.  The company believes that as a result of considerable investment which resulted into reduced debt for the company, there would be considerable savings in the financial cost of the company in coming quarters.  

The board of directors in today’s meeting approved various capital expenditures for the BMR ( balancing, modernization and replacement) of the existing plant, investments on new technologies and products, alternate energy, efficiency improvement and reducing operating costs.

PESCO approves Rs3 per unit

relief for idustrial consumers

PESHAWAR (APP): PESCO Board of Directors (BoD) Monday formally approved relief of Rs 3 per unit for industrial consumers for immediate implementation. The meeting of BoD chaired by Malik Muhammad Assad Khan gave the formal approval in the wake of Prime Minister's announcement,said a statement issued by PESCO here. This relief would be immediately implemented and bills be revised if already issued. BoD besides discussing measures taken to make the company a profitable entity also approved minutes of its 104th meeting. Speaking on the occasion, Malik Muhammad Asad Khan stressed to increase performance and develop it as a "Consumer Friendly Company".

He said that PESCO has to reduce line losses and further improve recovery.

BoD was told that in areas where AT&C losses are upto 30%,load shedding has been finished and if people of other areas cooperate and remove illegal electricity connections further relief in load shedding would be given to them.

BoD said that full cooperation would be extended to provincial government in resolving electricity related problems. It was said that KP CM would be invited in the presentation very soon. A number of other managerial and administrative matters on the agenda were also approved.

Chief Executive PESCO Anwar Ul Haq Yousafzai also gave a comprehensive presentation regarding the company's performance.

Board Members including Chief Executive, Anwar Ul Haq Yousazai, Director General PR Shaukat Afzal, Secretary BoD, Khurshid Ahmad Orakzai also attended the meeting.