Earnings Report /
Pakistan

AGP Limited: 1QCY21 review – lower institutional sales this quarter

  • AGP has reported 1QCY21 NPAT of PKR384mn (EPS: PKR1.37), down 12% yoy and 8%qoq.

  • The result is lower than consensus due to lower institutional sales this quarter.

  • AGP is in the process of procuring Sputnik vaccines after the tremendous response in the first batch

Yusra Beg
Yusra Beg

Senior Investment Analyst

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Intermarket Securities
29 April 2021

AGP has reported 1QCY21 NPAT of PKR384mn (EPS: PKR1.37), down 12% yoy and 8%qoq. The result is lower than consensus due to lower institutional sales this quarter. That said, GMs have improved to 56.3% vs. 55.3% SPLY, albeit much lower than 59.8% reported in 4QCY20.

1QCY21 Result highlights:

  • AGP reported revenue of PKR1.64bn, down 7%yoy and 16%qoq. This is a sharp decline, led by lower institutional sales (Government orders) which may perhaps pick pace in the coming quarter. We expect Sputnik vaccine sales to also reflect from 2Q (c. PKR312mn).

  • Gross margins rose to 56.3% in 1QCY21 vs. 55.3% SPLY, albeit much lower than 59.8% in 4QCY20, reflecting the decline in institutional orders.

  • SG&A expenses rose 33%yoy but declined by a sharp 30%qoq in line with sales. These should rise as sales normalize. Finance costs declined 37%yoy due to lower interest rates.

Demand for the Covid-19 vaccines is rising with the rise in reported Covid-19 cases (c. 10% infection ratio). AGP is in the process of procuring Sputnik vaccines after the tremendous response in the first batch (50,000 vaccines). This, together with the potential recovery in institutional sales should improve earnings in the coming quarters. Similar to the broader pharmaceutical space, AGP has remained stable at bourse CYTD and trades at a CY21f P/E of 15.5x.