NBP’s nine-month profit up 10 percent on lucrative asset-mix

KARACHI: National Bank of Pakistan (NBP) recorded a 10 percent growth in its profit to Rs16.18 billion for the nine months period ended on September 30, translating into earnings per share (EPS) of Rs7.60, a bourse filing said on Tuesday.

NPB’s profit amounted to Rs14.70 billion with EPS of Rs6.91 in the corresponding period last year, a statement to Pakistan Stock Exchange (PSX) said.

The bank’s net interest/mark-up income increased 13.70 percent to Rs43.55 billion in the January-September period.

“This was achieved through maintaining an efficient asset-mix of high-yield loans and investments,” NBP said in a separate statement.

Brokerage Topline Securities attributed growth in profit to monetary tightening and asset growth.

“Key risks for the bank include deterioration in economic indicators, uptick in provisioning charge, and lower than expected rate hike,” Topline said in a flash note.

NBP has recently introduced changes in its operating structure to improve service quality.

Income from dividend and capital gains recorded a drop during the nine-month period due to the lacklustre performance of the stock market.

Overall non-interest income amounted to Rs22.49 billion, marginally lower compared to Rs22.99 billion a year earlier.

The bank’s balance sheet size increased 4.19 percent to Rs2.47 trillion in January-September. The bank’s deposits amounted to Rs1.799 trillion as of September 30, a 4.21 percent higher as compared to that of December 31, 2017. The bank’s net advances also rose to Rs828.46 billion, showing an increase of 12 percent. NBP recorded a pre-tax profit of Rs23.12 billion in the January-September period, slightly lower than Rs23.22 earned during the corresponding period a year ago.

But, the bank’s quarterly profit remained below the market’s expectation.

NBP registered a 44 percent year-on-year decrease in profit to Rs3.5 billion for the quarter ended September 30.

In July-September, net interest income increased nine percent year-on-year to Rs13.5 billion as the bank benefited from rising interest rates as well as expanding asset base.

Non-interest income of the bank was down three percent year-on-year to Rs7.5 billion in the quarter under review as a result of nine percent decline in fee income and a 66 percent decrease in capital gain on securities.

Pak Suzuki’s profit down 55pc in January-September

Profit of Pak Suzuki Motor Co. Ltd. sharply fell 55 percent to Rs1.392 billion for the nine-month period ended on September 30, translating into EPS of Rs16.92.

Pak Suzuki earned Rs3.096 billion with EPS of Rs37.63 during the corresponding period a year earlier.

Auto sector’s analyst Daniyal Adil at Topline Securities said the profit decreased due to 3.3 percentage points reduction in margins, a 48 percent increase in administrative expenses and an effective tax rate of 44 percent during the period compared to 31 percent a year earlier.

“We outline further unfavourable movement in exchange rate and commodity prices, regulatory changes, increased competition from existing and new players and disruptions in operations of principal company as key risks for the company,” Adil added.

The automaker’s revenue, however, increased to Rs89.018 billion in the January-September period compared to Rs72.802 billion in the corresponding period a year earlier.

Pak Suzuki reported a 91 percent year-on-year drop in its profit to Rs95 million with EPS of Rs1.2 in the July-September quarter.

“Earnings were below expectations as margin compressions and taxations were higher than anticipated,” Adil said. “Effective tax rate clocked in at 79 percent due to applicability of turnover tax as opposed to tax on profits.”

Net sales of the company rose three percent year-on-year in the quarter under review due to four price hikes in 2018, despite a 10 percent decline in volumes. Cost of sales rose seven percent year-on-year, leading to significant gross margin attrition.

Drop in margins was a result of rupee depreciation and higher raw material costs, Adil added. “The rapid 67 percent increase in administrative expenses was due to salary and wages increments.”

Pak Suzuki’s other income declined 59 percent year-on-year during the quarter as interest income from investments declined.

Nestlé Pakistan’s nine-month profit drops 24 percent

Nestlé Pakistan Ltd. recorded a 24 percent drop in its profit to Rs8.6 billion for the nine months period ended on September 30, translating into EPS of Rs190.27. Nestlé earned Rs11.3 billion with EPS of Rs249.8 in the same period a year earlier.

The company announced second interim cash dividend of Rs75/share. Nestlé said higher input and energy costs due to rupee devaluation and increase in the prices of commodities hit the company’s profitability.

Nestlé’s revenue increased 1.8 percent to Rs94.09 billion for the January-September period “despite increasingly difficult economic conditions and competitive pressures”.

Kot Addu’s quarterly profit increases 43 percent

Kot Addu Power Company Ltd. recorded a 43 percent rise in its profit to Rs3.12 billion for the quarter ended on September 30, translating into EPS of Rs3.54.

Kot Addu earned Rs2.18 billion with EPS of Rs2.48 for the corresponding quarter a year earlier. The power producer’s revenue increased to Rs31.59 billion in July-September from Rs21.57 billion in the corresponding period a year earlier. Other income rose to Rs3.07 billion from Rs1.39 billion.