Hascol reports record losses in 2022
Hascol Petroleum, a leading player in the energy sector, faced a tumultuous year in 2022 as its net losses soared to an alarming Rs14.49 billion compared to Rs7.59 billion in the previous year 2021.
In a statement released at the Pakistan Stock Exchange (PSX) on Thursday, the company attributed the staggering losses to two key factors: “due to the devaluation of foreign currency and high-interest rates, the company incurred a net foreign exchange loss of Rs4.83 billion and an unpaid interest cost of Rs8.40 billion.” This adverse financial performance translated into a loss per share of Rs14.51 in 2022, a sharp contrast to Rs7.58 in 2021, according to the company’s profit or loss accounts available at PSX.
Despite these significant setbacks, Hascol Petroleum managed to post a gross profit (excluding the company’s expenditures and taxes) of Rs3.18 billion during the review period. This represents an improvement from Rs1.98 billion in the previous year, largely attributed to better margins despite facing lower volumes. Acknowledging the challenges, the company assured stakeholders that both factors contributing to the losses are being diligently addressed through a proposed restructuring plan. The aim is to ensure the company’s earnings rebound positively post-restructuring.
Working capital constraints posed another major hurdle for Hascol Petroleum. However, credit support from its single majority shareholder, Vitol, proved instrumental in overcoming supply challenges, reaffirming the company’s viability.
The company’s management, in close collaboration with statutory auditors, worked tirelessly under the guidance of the board of directors to ensure that the company’s financial statements offer a true and fair view of its affairs.
In a bid to bounce back, the company has embarked on a corporate revival plan primarily centred on the restructuring of its bank debt. The plan also seeks to attract fresh equity from potential investors. The company anticipates concluding its restructuring process in the next few months.
Looking ahead, the company’s board and management express confidence that the liquidity issues will be effectively addressed in the coming months, thereby delivering substantial benefits to all stakeholders in the ensuing years, as highlighted in the company’s official statement.
Published in The Express Tribune, August 4th, 2023.
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