ISL - International Steels Limited

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xResearch

Active member
Apr 9, 2017
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#2
Aba Ali Habib Research
11 August 2017


ISL- Result Preview: EPS to grow backed by improving margins and volumetric sales
  • ISL is scheduled to announce its FY17 results on 15th August 2017. We anticipate ISL to post an EPS of PKR 6.66 in FY17, up by 1.46 YoY owing to 1) surge in topline by 73% YoY backed by increase in volumetric sales owing to upsurge in local demand of flat steel products due to increase in import duties and 2) increase in margins by 4.5pps to 18.7% in FY17 owing to pricing power ISL possess post antidumping duty on CRC and HDGC.
  • We expect ISL to post an EPS of PKR 2.02 in 4QFY17 representing an increase of 5.3% QoQ and 4.9% YoY. Topline in 4QFY17 is expected to grow by 11.6% QoQ on the back of strong domestic demand However, gross margins are likely to maintain owing to stabilized international HRC prices and are expected to clock in at 17.7% in 4QFY17.
  • We maintain our Dec’17 TP of PKR 137, implying an upside of 6.7% along with dividend yield of 3.1%. However, we downgrade our stance from “BUY” to “HOLD” on this scrip due to price hike of 15% since our recommendation (10th July).
 

xResearch

Active member
Apr 9, 2017
1,926
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#3
International Steels Limited
(ISL)

August 15th, 2017

FINANCIAL RESULT FOR THE YEAR ENDED 30/06/2017
PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 4,608.774
PROFIT/LOSS AFTER TAXATION RS. IN MILLION 3,044.022
EPS = 7.00
DIVIDEND = 10%
ANNUAL GENERAL MEETING WILL BE HELD ON 26/09/2017
BOOK CLOSURE FROM 16/09/2017
BOOK CLOSURE TO 26/09/2017
 

ACA

New member
Apr 9, 2017
187
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0
#4
Aba Ali Habib Research
16 August 2017

ISL Review: FY17 EPS clocked in at PKR 7.0, up by 1.58x YoY

  • ISL announced its FY17 results today, where EPS of the company clocked in at PKR 7.0 (FY16: PKR 2.71), up by 1.58x YoY. Higher earnings are attributable to increase in volumetric sales by 65% and gross margins by 3.3pp YoY.
  • EBT has declined QoQ by 27% to PKR 1.01bn mainly due to 6% QoQ decrease in topline & 3pp YoY decline in gross margins due to uptick in global HRC prices. However, EPS has increased QoQ by 20% owing to tax reversals in current quarter (PKR -11mn) likely due to higher utilization of deferred tax assets.
  • Company announced final cash dividend of PKR 1.0 per share taking full year dividend to PKR 3.5 per share.
  • We maintain our “BUY” recommendation on ISL with Dec’17 PT of PKR 133/share with potential upside of 6.3%.
ISL Review FY17_Page_1.jpeg
 

xResearch

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Apr 9, 2017
1,926
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#5
ABA ALI HABIB RESEARCH
23 JANUARY 2018


ISL- Result Review
2QFY18 EPS clocked in at PKR 2.71, in line with our expectations

  • ISL announced its 2QFY18 results today, where EPS of the company clocked in at PKR 2.71 (in line with our expectations of PKR 2.75) as against PKR 1.37 in SPLY, up by 98% YoY. The increase in earnings could be attributable to increase in topline by 33% YoY as company experienced increase in sales volume and selling price owing to upsurge in local demand of flat steel products post anti-dumping duties.
  • During the year company raised prices of its end product by PKR 5K per tons (average: PKR 84k per ton) to circumvent the impact of increasing international HRC prices. Therefore, Company was able to secure gross margins of 17.4% (in line with our expectations of 17.7%) in 2QFY18 which are 1pps higher QoQ.
  • The company announced an interim cash dividend of PKR 1.5 per share in 2QFY18.
  • We maintain our “BUY” stance on this scrip with Jun’18 TP of PKR 141, implying an upside of 13.8% along with dividend yield of 3.2%.
 

xResearch

Active member
Apr 9, 2017
1,926
1
38
#6
International Steels Limited
(ISL)

January 23rd, 2018
03:12:47 PM

FINANCIAL RESULT FOR THE HALF YEAR ENDED 31/12/2017


PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 3,040.118
PROFIT/LOSS AFTER TAXATION RS. IN MILLION 2,181.543

EPS = 5.02
DIVIDEND = 15%

BOOK CLOSURE FROM 14/03/2018
BOOK CLOSURE TO 22/03/2018
 
Apr 11, 2017
830
1
18
#7
International Steels Limited (ISL): EPS likely to stand at PKR 2.65 in 3QFY18, up by 39% YoY

11 April 2018
Aba Ali Habib Securities (Private) Limited



  • ISL is scheduled to announce its 3QFY18 results on 17th April 2018. We anticipate ISL to post an EPS of PKR 2.65 in 3QFY18, up by 39% YoY owing to surge in topline by 24% YoY to PKR 11.85bn. The increase is topline can be attributable to surge in volumetric sales owing to upsurge in local demand of flat steel products post anti-dumping duties and increase in local prices by 2k this quarter. We expect the company to secure gross margins of 17.85%, up by 0.4% QoQ
  • We reckon increase in the finance cost of the company by 42% owing to increase in short term borrowings to book high raw materials in 2QFY18. We have kept the effective tax rate for the quarter to be 30% as against 39% in SPLY.
  • We maintain our Dec’18 TP of PKR 131, implying an upside of 7% along with a dividend yield of 3.1%. However, we maintain our stance to “HOLD” on this scrip.
 
Apr 11, 2017
830
1
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#8
International Steels Limited (ISL): 9MFY18 EPS expected at PKR 7.18, up by a massive 55%YoY!


13 April 2018
Taurus Securities Limited




  • International Steels Limited (ISL) is expected to announce its 9MFY18 financial results on April 17, 2018, wherein the flat steel roller is expected to post a PAT of PKR 3.1bn (EPS: PKR 7.18), as against a PAT of PKR 2.0bn (EPS: PKR 4.64) in the SPLY, up by a massive 55%YoY
  • Sales revenue in 9MFY18 is expected to grow by 39%YoY on the back of ~12%YoY increase in average selling prices, and an increase of ~25k tons of flat steels rolled out.
  • Gross margins in 9MFY18 are expected to fall by 2.66pps YoY on the back of increase in realized HRC costs (up ~32%YoY).
  • During 3QFY18, ISL's bottom-line is expected to fall by 20%QoQ to PKR2.16/share vs. PKR 2.71/share in 2QFY18, mainly on account of higher HRC costs which account for ~90% of cost of sales.
 
Apr 11, 2017
830
1
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#9
International Steels limited (ISL): 9MFY18 EPS to grow 73% on higher volumes & margins


13 April 2018
Pearl Securities Limited




  • The board meeting of International Steels Limited is scheduled on 17th of April’18 to announce its 9MFY18 financial results.
  • The profit after tax of the company is expected at PKR3,484mn (EPS PKR8.01) in 9MFY18 as compared to PKR2,017mn (EPS PKR4.64) in 9MFY17, a colossal increase of 73%YoY. The considerable increase in earning is expected on the back of higher volumetric sales (8%YoY), GP/ton (24% YoY) & lower tax expenses (-10%YoY) during the period
  • In 3QFY18 alone, profit after tax is likely to clock in at PKR1,302mn (EPS PKR2.99) - an increase of 52%YoY. Higher volumes & GP/ton remain the same reason behind expectations of upbeat quarterly earnings.
  • Revenue of the company is likely to post a substantial increase of 41%YoY at PKR34,851mn in 9MFY18 as compared to PKR24,783mn in 9MFY17. The growth in revenue is expected mainly on the back of higher volumes & prices during 9MFY18.
 

bullrun

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Apr 11, 2017
830
1
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#10
International Steels Limited (ISL): CRC expansion to boost up earnings potential


16 May 2018
Abbasi Securities (Private) Limited




  • We initiate our coverage on ISL with BUY stance and DCF based target price of Rs133/- (Dec- REP-091 18), providing 24% upside and a dividend yield of around 4.4%. ISL is currently trading at FY18E and FY19E P/E of 11.2x and 8.9x respectively
  • Capacity expansion of CRC (Cold Rolled Coil) to meet growing local demand and capture market share of Importers. Furthermore this will also allow them to produce more HDGC (Hot Dip Galvanized Coil) on which ISL earns a higher margin
  • Imposition of ADD (Anti Dumping Duty) by NTC (National Tariff Commission) on flat steel which provide a relief to the local industry whereas local prices are still 18 to 20 percent lower than the imported landed price of CRC from China.
 
Apr 11, 2017
830
1
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#11
International Steels (ISL): Expansion OR no Expansion in 4QFY18


16 May 2018
Standard Capital Securities (Private) Limited




  • We continue our coverage on International Steels (ISL). Couple of days ago, ISL increased average price of Cold Roll Coil (CRC) & Hot Dipped Galvanized Coil (HDGC) by ~Rs3000/MT.
  • We have revisited our model and updated recent hike in prices up to Rs98,650/MT of CRC and Rs101,773/MT of HDGC. The global HRC prices was also around $600/MT until now in this quarter. However, landed price of HRC in PKR is Rs74k/MT; hence we assumed same price of HRC in 4QFY18 for estimations.
  • As per our model, assuming without expansion we expect total sales volume could reach 123k MT in 4QFY18 thus posting a revenue of Rs12.168bn whilst maintaining gross & net margins of 18% & 9% respectively. We expect ISL to earn Rs2.52/sh in 4QFY18 and this will result in cumulative earnings of Rs9.95/sh in FY18 (exclusive of expansion impact).
 
Apr 11, 2017
830
1
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#12
International Steels Limited (ISL): Anti-Dumping Duties Imposed on Color Coated Steel Coils/Sheets


13 June 2018
Elixir Securities Pakistan (Private) Limited




  • National Tariff Commission’s (NTC) anti-dumping investigation against imports of color coated steel coils/sheets imports originating from China and South Africa (started 10th June, 2017) was finally concluded with imposition of definitive anti-dumping duties on the said dumped imports in the range of 5.36%-14.24%.
  • NTC determined that material injury was caused to the domestic industry and threat of material injury persisted. It also noted that there was significant increase in volume of dumped imports and significant price undercutting
  • As a result, local industry suffered material injury on account of 1) lower levels of production & utilization, 2) loss of market share, 3) inventory pilling, and 4) negative impact on growth
  • ISL has a relatively small capacity of 84,000tpa of color coated coils in comparison to its post- expansion CRC capacities of 1,000,000tpa/462,000tpa cold rolled coil (CRC) / galvanize coil (GC). The other Flat Steel manufacturer, Aisha Steel (ASL), does not have a color coated manufacturing facility.
 
Apr 11, 2017
830
1
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#13
International Steels Limited (ISL): Initiation of production from CRC mill capacity enhancement project


27 June 2018
Foundation Securities (Pvt.) Limited




  • International Steels Limited (ISL KA) has announced achievement of COD of its new CRC Mill, after completion of the project, ISL will be the largest flat steel manufacturer in the country.
  • ISL new rolling capacity would now be 1mn MT (increased from 0.55MT), that achievement would provide room for the company to increase its market share and be in the position of market leader as in near-term there are no nearby capacity enhancements coming online.
  • To increase its footprints nationwide ISL had already planned to build its facilitation centers in the Northern region. This would bode well for the company to gain customer loyalty for the business in our view.
  • To increase its footprints nationwide ISL had already planned to build its facilitation centers in the Northern region. This would bode well for the company to gain customer loyalty for the business in our view.
 
Apr 11, 2017
830
1
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#14
International Steel Limited (ISL): Exogenous factors to limit upside


03 July 2018
Foundation Securities (Pvt.) Limited




  • Looming global trade war has somewhat spoiled International Steel’s (ISL PA) value proposition, however we believe its long-term value remains intact. Duty protection would cushion the margins whereas 0.45mn tons capacity addition to provide positive volumetric variance ahead. We are placing our bet on import substitution rather than growth in industry size. Hence, despite lowering our June-19 TP to R129.8/sh (given lower LT margins) we reiterate ‘Outperform’ stance with the stock currently available at FY19/20 PE of 7.3/6.2x and provides front loaded 5-ys earnings CAGR of 14%.
  • Global trade war to put margins under pressure: Growing concerns of global trade war as Trump administration implements its ‘Buy American Hire American’ manifesto has created unprecedented volatility in steel market. On-going CRC-HRC margins have squeezed to US$62/ton, bringing 4QFY18 avg margins down to US$69/ton (down 15%/34% YoY/QoQ). Moreover, the on-going margins are 50% lower than 10-year avg of US$136/ton. Subsequently, we revisit our core-margins assumption to better reflect the new dynamics. We reduce our FY19/20 margin assumption to US$85/95/ton (previous US$110/ton) while also lower our LT margin assumption to US$100/ton.
  • However, we do believe that as long as ADD duties remain intact it would provide some cushion to ISL’s margins. To recall, the govt has imposed 6-40% and 14-19% antidumping duty on HDGC and CRC respectively till FY22.
 
Apr 11, 2017
830
1
18
#15
International Steels Limited
(ISL)

October 16th, 2018
02:52:39 PM

FINANCIAL RESULT FOR THE FIRST QUARTER ENDED 30/09/2018

PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 1,141.648
PROFIT/LOSS AFTER TAXATION RS. IN MILLION 841.343
EPS = 1.93