KARACHI, April 14: Corporates are expected to turn out a mixed bag of results as quarterly financial figures are released this month and the next. The oil, PSF, auto and gas distribution companies might be able to post healthy bottomlines, while the cement, textile, banking and fertilizer sectors could show pressure on earnings and margins.

Until the end of April, quarterly results are to unveiled by companies that close their accounting year in June (Q3 results) and for those with year ended on December (Q1 results). For companies with their accounting year at end-September, half yearly figures would have to be released by the end of next month.

Khalid Iqbal Siddiqui, analyst at InvestCap, said the oil sector companies, i.e the oil marketing companies (OMCs) — the PSO and the Shell — and the Pakistan Oilfields could be expected to have earned substantial returns during January-March 2003 quarter due to inventory gains. Average crude prices during Jan-March 2003 had jumped up by around 50 per cent compared with the corresponding period of the previous year. This translated into higher pries for products locally, thereby enabling higher earnings for the company, the analyst said.

“The local PSF sector is also expected to benefit from the same inventory gains phenomenon as the oil sector,” says Khalid, explaining that the reason being petrochemical nature of products in the PSF sector. He pointed out that local PSF prices had increased to a level of Rs80 per kg (excluding GST) during March, which would help put a gloss over the bottomline of PSF sector companies.

Automobile manufacturers are slated to post healthy results for Q3FY03 as sales of cars had remained buoyant and the rupee had appreciated in value, both of which could have yielded healthy margins for the auto companies.

Cement companies were embroiled in teething competition as the ‘cement cartel’ could not be revived during Q3FY03. Excess supply and cut throat competition among companies would leave their mark on the profitability of companies and erode their margins. The local textile sector would also have suffered a squeeze on margins owing to the consistent rise in prices of raw material (cotton and fibre).

Banks were likely to have suffered margin erosions due to falling interest rates. However, that could be offset by booking of capital gains on investments and lower provisioning for non- performing loans.

Investors are looking forward to the two gas distribution companies (the Sui twins), the SNGPL and the SSGC, to have maintained their improved performance during Q3. “PTCL’s earnings are expected to stay on track towards surpassing the Rs4 per share mark for full FY03,” says the analyst.