Attock Petroleum Limited (APL) announced the financial result for 9MFY23, whereby the company has posted a profit after tax (PAT) of PKR 9,836mn (EPS: PKR 79.06) against PKR 11,247mn (EPS: PKR 90.40) in 9MFY22, down by 13% YoY. On a quarterly basis, earnings clocked-in at PKR 4,298mn (EPS: PKR 34.54), down by 7% YoY amid lower inventory gains. On a sequential basis, the net profit swelled up by 3.4x QoQ owed to i) inventory gain during the quarter, and ii) increase in OMC margins of major petroleum products.

Result Highlights

· Net sales during 9MFY23 climbed up by 46% YoY given higher average retail price of petroleum products. However, overall volumes declined by 21% YoY (sales of MS, HSD and FO reduced by 13%, 25% and 30% YoY, respectively). Whereas, the topline during 3QFY23 settled at PKR 113,057mn, up by 30% YoY amid higher product prices. Meanwhile, the volumes reported a fall of 17% YoY (MS, FO and HSD volumes down by 15%, 24% and 29% YoY, respectively).

· Gross margins of the company depleted by 311bps YoY to 5.64% in 9MFY23 against 8.75% in 9MFY22. The decline in gross margins can be attributable to inventory losses during the period. On the other hand, the gross margins in 3QFY23 arrived at 6.93% vis-à-vis 9.84% in SPLY given lower inventory gains of ~USD 3.5bn during the quarter.

· The operating expenses during 9MFY23 ascended up to 44% YoY, arriving at PKR 7,360mn owing to exchange loss during the period. Whereas, operating expenses in 3QFY23 settled at PKR 2,130mn, up by 4% YoY owed to the aforementioned reason.

· Finance cost showcased a surge of 52% YoY to PKR 1,630mn in 9MFY23 given higher markup charged on late payments during the period. The finance cost during 3QFY23 clocked in at PKR 573mn, up by 72% YoY due to the reason stated above.

· The company recorded effective taxation at 34% in 3QFY23 vis-à-vis 29% in 3QFY22.

Courtesy – AHL Research