Corporate result: Attock Petroleum's profit drops 62% to Rs555.65m

Plunge comes due to exorbitant cost of sales

KARACHI: Attock Petroleum Limited's (APL) profit dropped 62% to Rs555.65 million in the quarter ended December 31, 2018 mainly due to the exorbitant cost of sales.

The company had registered a profit of Rs1.48 billion in the same quarter of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Tuesday.

Earnings per share fell to Rs5.58 in the Oct-Dec 2018 quarter compared to Rs14.87 in the corresponding quarter of last year.



The board of directors recommended an interim cash dividend of Rs10 per share. The entitlement will be paid to the shareholders whose names appear in the register of members on February 6, 2019.

APL's share price dropped 4.66%, or Rs20.36, and closed at Rs416.63 with trading in 112,600 shares at the PSX.

The company booked net sales of Rs57.72 billion in the Oct-Dec 2018 quarter, which was 52% higher than sales of Rs38.06 billion in the same quarter of previous year.

Arif Habib Limited's analyst Arsalan Hanif said the revenues grew "on account of higher product prices along with volumetric growth (7.6% year-on-year; volumes of petrol and diesel grew 24% and 5% respectively, whereas furnace oil sales showed a steep decline of 50%)."

The cost of sales, however, came close to the sales revenue at Rs56.27 billion which obstructed the growth in profit. The cost of sales had been at Rs35.63 billion in the same quarter of last year.

Finance cost increased to Rs215.71 million compared to Rs136.24 million last year. "Finance cost jumped up … given the rise in mark-up charged on delayed payments," he said.



On the other hand, the finance income improved to Rs369.35 million compared to Rs309.10 million last year.

Gross margins fell 392 basis points to 2.50% in the Oct-Dec 2018 quarter compared to 6.42% in the same quarter of last year.

"Despite an effective increase in ex-refinery prices in the period under review, the decline in gross margins can be attributable to the company recording inventory at a lower cost or net realisable value, which resulted in a loss of Rs500-600 million," he said.

The company recorded effective taxation at 34.9% in the quarter compared to 28.2% in the same quarter of last year, he said.

Cumulatively, in first half (Jul-Dec) of the current fiscal year, the company's profit stood at Rs2.10 billion (earnings per share at Rs21.13) compared to Rs2.81 billion (earnings per share Rs28.24) in the same period of last year.