Good day for Attock Group

APL net profit surged 17 per cent to Rs1.7 billion in first six months of fiscal 2011 on back of higher sales.

KARACHI: The Attock Group announced financial results for its subsidiaries on Friday, according to which the oil marketing wing’s profit jumped while the refinery switched from loss to profit. The cement unit’s net profit, however, dropped 60 per cent but it was in line with the entire cement sector.

Attock Petroleum Limited’s (APL) net profit surged 17 per cent to Rs1.7 billion in the first six months (July to December) of fiscal 2011 on the back of higher sales of its products.

High sulphur furnace oil, kerosene and motor gasoline volumes are expected to have posted significant growth of 43 per cent, 49 per cent and 47 per cent, respectively, according to BMA Capital.

Net sales rose nine per cent as a result of an 8.5 per cent increase in average Arab light crude oil prices during the period.

Sales of energy products are expected to rebound in the post-flood scenario and because of possible growth in tarmac sales on the back of increased infrastructure rebuilding activity, said BMA Capital analyst Muhammad Ali Taufiq. APL being a major stakeholder in sale of non-energy products will significantly benefit for the rest of the year, added Taufiq.

Refinery subsidiary

Attock Refinery Limited switched to profit of Rs1.5 billion during July to December 2010 from a loss of Rs210 million in the same period last year.

Gross refining margins for the company during the second quarter (October to December) of fiscal 2011 increased more than 15 times to $4.44 per barrel compared with $0.28 per barrel over the same period last year.

Net sales rose 28 per cent to Rs50.6 billion on the back of a six per cent uptick in capacity utilisation and 8.5 per cent increase in oil prices.

The company is also expected to post 68 per cent increase in dividend income during the first half of fiscal 2011 on the back of a 60 per cent increase in dividend income from National Refinery Limited and 33 per cent increase in dividend income from Attock Petroleum Limited, said BMA Capital analyst Omar Rafiq.

Moreover, dividends of Rs150 million from Attock Gen are also expected to be recorded in the first half of fiscal 2011.

Cement unit

Attock Cement’s net profit decreased 60 per cent to Rs235 million in the first half of fiscal 2011 against Rs624 million in the same period last year.

Net sales were almost the same during both periods but the cost of sales increased, affecting the net profit, said an analyst. Cost of sales increased 23 per cent to Rs3.2 billion from last year’s Rs2.6 billion.

Although cement sales are expected to rebound after February, profitability of market players is unlikely to register growth owing to increasing coal prices, said Rafiq. Unless prices increase further, profitability will remain lacklustre, added Rafiq.

Published in The Express Tribune, January 29^th,  2011.