KARACHI, Feb 10: On Thursday, Engro Chemical Pakistan Limited and Askari Commercial Bank Limited announced their financial results for the year ended December 31, 2004.

Engro posted profit after tax (PAT) at Rs1,611 million, representing increase of 3.5 per cent over the tax profit of Rs1,557 million for the previous year.

There was possibly no earnings surprise but the board paid higher than generally expected final dividend. Final recommended at Rs4 per share was announced, while much of the market was looking at Rs2.5 to Rs3 per share. The company had already paid interim dividends totalling Rs4.5 per share, all of which brought the total payout at Rs8.50 or 85 per cent for the year.

Engro's profitability stood within the analysts' range: A sample of two forecasts: (profit after tax: Rs1,557 million by First National Equities and within a range of Rs1.51 to Rs1.59 billion by Capital One Equities).

The market saw the Engro stock drop by Rs1.50 to close at Rs125.25 with trading seen in 4 million shares.

Askari Commercial Bank Limited unveiled after tax profit amounting to Rs1,923 million, up by 74 per cent from the earlier year's PAT of Rs1,103 million. The Board declared final cash dividend at Rs2 per share. The bank also stated in its announcement: "The Board of Directors has in principal decided to recommend issuance of bonus shares in proportion of 20 shares for every 100 shares held i.e. at the rate of 20 per cent" and added: "Please note that a clarification was earlier sought from SECP whether the Bank could ignore its contingencies, being peculiar in nature to banking business, in order to arrive at its "free reserves" (in terms of rule 5 of the Companies (Issue of Capital) Rules 1996, as required by rule 6(iv) of the said Rules. The SECP clarified this issue in its letter dated March 21, 2002 that the Bank need not take into account these contingencies in order to arrive at its "free reserves". A further clarification is therefore required from SECP".

The price of the Askari Bank stock shed 55 paisa and closed at Rs109 on Thursday, with trading noted in 4.4 million shares.

Askari Bank's earnings and dividend stood much in line with most analysts' expectations. The bank was projected to report net earnings within a range of Rs1.94-Rs1.99 billion.

The market was also looking forward to the bonus issue. The Capital One Equities in their pre-results review said: "ACBL is all set to give a much awaited bonus issue of 20-25 per cent to execute the SBP's requirement of a minimum paid-up capital requirement of Rs1.5 billion up to December 31, 2004 (still facing 19 per cent shortfall to attain the level of Rs1.5 billion). We believe that the ACBL must have sought an approval from the State Bank to delay the raising of the paid-up capital before Dec 31, 2004, as the bank otherwise maintains a huge tier-1 base of Rs5.4 billion as at September 30, 2004."