Attock Refinery’s performance and future outlook

The management of Attock Refinery Limited (ATRL) held a Corporate Briefing session on 29th Sep’21 to discuss the company’s performance and future outlook.

 Brief Takeaways

·        The company posted a loss after tax (LAT) of PKR 2,145mn (LPS: PKR 20.12) in FY21 against PKR 2,825mn (LPS: PKR 26.50) in FY20. Despite heavy inventory gains of PKR 3.7bn compared to inventory loss of PKR 4.0bn, the loss came on the back of lower gross refinery margins on MS and HSD.

·        The company recorded exchange gains of PKR 216mn in FY21.

·        Currently, the company is in negotiation with the government for approval of Pakistan Oil Refinery policy.

·        Income tax holidays and protection duty became part of the finance bill so the company was expecting the new oil refining policy to be approved before July ’21 but there is a delay in the approval hence it is expected that all the deadlines in the draft policy will be enhanced.

·        The company is targeting three new projects such as i) Continuous Catalyst Regeneration (CCR) plant to produce Motor Gasoline and reduce the production of Naptha to zero, ii) revamping of Diesel Hydrodesulphurisation (DHDS) project, and iii) Joint project of FFO upgradation.

·        Expansion project will cost around USD 500mn for CCR project and DHDS upgradation. Joint project for FFO upgradation is not part of that USD 500mn cost. This joint project will cost around USD 1.5-2.0bn.

·        The company said it has to ensure crude availability in North as before that it cannot set up a new oil refinery for 50,000bpd.

·        All the amount generated through duty protection will be kept in a separate account and it will be reflected in the income statement.

·        The projects will materialize if the policy is approved and it will take five years to complete CCR project.

Courtesy – AHL Research

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