Corporate results: Attock Refinery profit drops 59% in July-Sept quarter

Low margins, rupee fall and inventory loss hit the company.

Our Correspondent October 22, 2013

Net profit was Rs601 million against Rs1.472 billion in the same period of previous year. PHOTO: FILE

KARACHI: Attock Refinery Limited (ARL) on Tuesday announced a 59% decline in net profit during the July-September quarter of financial year 2013-14 over the same period of previous year as it was hammered by depressed refining margins, rupee depreciation and inventory loss.

Net profit was Rs601 million against Rs1.472 billion in the same period of previous year. The company did not announce any cash or share dividend.

The company would have started the year with a loss had it not been for the high other income, which includes dividend payments from sister companies and interest earnings on bank deposits.

ARL posted a gross loss of Rs166 million compared with last year’s profit of Rs1.959 billion, indicating the widening gap between crude oil cost and prices of petroleum products that the refineries get.

“The up and down movement in product prices will continue but I am expecting the refining margins to improve in coming months,” said Shahid Ali, head of research at Summit Capital.

Finance cost of the company at Rs857 million against last year’s just Rs49.8 million appeared large mainly because of exchange loss of around Rs850 million, he said.

ARL’s bottom line was supported by non-refinery income of Rs1.368 billion. Ali said the company had recorded this income in the second quarter of last fiscal year. “This dividend income from Attock General, National Refinery Limited and Pakistan Oilfields Limited is higher by 30%.”

POL earnings rise

Another Attock Group company, Pakistan Oilfields Limited reported a 41% year-on-year rise in earnings on the back of higher petroleum output, appreciation of the dollar and better international oil prices.

“Arab Light Oil price has consistently hovered above $105 per barrel in the first quarter of 2013-14 averaging at $108, compared to $102 per barrel in the fourth (April-June 2013) quarter of last fiscal year,” said Global Research.

Dividend income from associated companies – NRL and APL – also helped POL earnings. Higher petroleum production from Thal and Adhi blocks added to the company’s strong growth.

Published in The Express Tribune, October 23^rd, 2013.

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