Earnings Report /

AGP Limited: 4QCY21 review – Sandoz leads sharp jump in sales in 4Q

  • AGP reported 4QCY21 EPS of PKR2.26, up 51% yoy and a sharp 85%qoq – a better than anticipated result.

  • The addition of Sandoz Pakistan has helped support weak sales from Afghanistan.

  • This is a strong result by AGP and we reiterate our Buy rating with a TP of PKR105/sh.

Yusra Beg
Yusra Beg

Senior Investment Analyst

Intermarket Securities
29 March 2022

AGP reported 4QCY21 consolidated NPAT of PKR632mn (EPS: PKR2.26), up 51% yoy and 85%qoq. This takes CY21 NPAT to PKR1.7bn (EPS: PKR6.24), up 10%yoy. The result is better than expected led by strong sales from Sandoz Pakistan (PKR1.3bn) and standalone sales from AGP, while trade disruptions in Afghanistan are subsiding. Results were accompanied with a final cash dividend of PKR2.5/sh.

4QCY21 Key result highlights:

  • AGP’s revenues rose to PKR3.4bn in 4QCY21, 73% yoy and 47% qoq. Revenue from Sandoz Pakistan in the 5 months period is now PKR1.3bn, with remaining emerging from AGP’s core business. As per our talks with the management, Afghanistan operations are beginning to stabilize. 

  • AGP posted gross margins of 55%, which are lower vs. last year (60% in 4QCY20) due to lower margins in the recently added Sandoz portfolio. AGP has not witnessed any meaningful exchange rate volatility due to strong inventory buildup, as expected.

  • SG&A expenses rose 44%yoy in line with the rise in sales. Finance costs, rose to PKR82mn vs. PKR30mn SPLY. AGP has also reported a PKR6mn loss on its other income.

AGP’s consolidated result is very strong, due to addition of Sandoz Pakistan. The impact of Afghanistan operations is beginning to subside. We have a Buy rating on AGP with a TP of PKR105/sh.