February 27, 2007	Tuesday	Safar 9, 1428

KARACHI, Feb 26: Several blue chip companies announced financial results on Monday. From the investors’ point of view, National Bank of Pakistan (NBP) was the most coveted.

NATIONAL BANK OF PAKISTAN: The bank announced net profit of Rs17.02 billion for the year ended December 31, 2006. This translated into earnings per share (eps) at Rs24. The net profit represented growth of 34 per cent over Rs12.71 billion (eps) of Rs17.9 the previous year.

The board also announced cash dividend at Rs4 per share, which was tied to a bonus issue at 15pc. In 2005, NBP had paid cash dividend at Rs2.50 and bonus shares at 20pc.

The analysts’ consensus forecast of eps for NBP was between Rs25.50 and Rs26 and almost every analyst thought that cash dividend would be paid between Rs3 to Rs3.50 and bonus shares at 20 per cent. The lower-than-expected results saw the share in NBP take a dip of Rs14.10 to close at Rs273 on volume of 14 million shares on Monday. The heavy-weight stock also dragged the entire market down, which lost 214 points with KSE-100 index ending at 11,394.

The interesting more than intriguing fact was that the results were declared by the board at the opening of the market on Monday. But almost everyone was in the knowledge of profit and payout after the board meeting on Saturday. SMS flying from analysts to clients and friends stated what turned out to be exact figures of net profit and payouts.

But more people than the members of the company board must be armed with the results after the meeting. Who leaked the figures? A junior officer, a typist or even a peon?

The board is not to be blamed but credited for having kept the numbers wrapped in secrecy until the end of meeting.

After that slight digress back to the accounts. The NBP’s net interest income grew by 29pc to Rs30.15bn compared to Rs23.37bn last year on the back of rising spreads. Non interest income at Rs12.16bn portrayed a growth of 29pc. Amongst, non-interest income, fee income of the bank showed growth of 25pc to reach Rs6.14bn from Rs4.93bn last year while dividend income of the bank stood at Rs2.89bn, representing massive increase of 68 per cent over Rs1.72bn the year earlier.

Analyst Atif Malik said that it was primarily due to record Rs5.8 per unit cash dividend announced by NIT in June 2006 of which NBP holds substantial units. This dividend contributed Rs2.85 per share in after tax profits of NBP. Provisions made by the bank, on the other hand, also increased significantly as they were recorded at Rs2.37bn versus Rs2.22bn in 2005 - a rise of 7pc. While, administrative expenses stood at Rs13.44bn - up by 20pc.

PAKISTAN OILFIELDS LIMITED: For 1HY07, POL posted net income at Rs3.75bn (EPS Rs19) – up by 30pc from Rs2.89bn (EPS Rs14.67) during the corresponding period of the previous year.

Analyst Faraz Farooq stated that the company had booked an exploration cost reversal related to Manzalai field which was declared commercial in Jan 2007. As per its accounting policy, POL expenses out all exploration cost initially irrespective of the drilling outcome.

And upon the commercial declaration by the government, the direct cost is capitalized which leads to the reversal of exploration cost expensed earlier. The earnings were in line with expectation under reversal case scenario.

Moreover, as expected, the company did not announce any dividend owing to the fact that it intends to participate in the upcoming bidding process of PSO along with other group companies.

During the period July-December 2006, net sales of the company grew by 10pc and reached Rs7.9bn. In 1HFY07, POL saw output down by 13pc, though gas supply was up by 1pc. Thus, the growth in revenues mainly arrived from better realised prices of both oil and gas.