The Attock Group’s companies posted a significant rise in its profit during FY23 as compared to FY22, increasing by 7%YoY to PKR74,872mn compared to PKR64,519mn in the same period last year. The mounting POL product prices along with the devaluation of PKR against USD played a major role in the rise in profitability, however, the higher taxation due to the imposition of super tax restricted the bottom line of the group.

The revenue of the group companies increased by 28%YoY to PKR 1,230bn mainly due to an increase in POL product prices and PKR depreciation, which increased the retail and realised price of the oil chain. However, the international oil prices posted a decline of 8%YoY to average USD81.1/bbl. local oil and gas production is also on a declining path, reducing by 7-10% YoY. Furthermore, heightened exchange gains from foreign currency deposits continue to support the bottom line.

Moreover, an increased return on fixed income resulting from rising interest rates and improved liquidity continues to reinforce additional other income. Gross margin was 11% in FY23 compared to 13% in FY22 as it decreased by 2%YoY due to inflationary pressure and commodity super cycle. As a result, the profit margin decreased by 1%YoY due to high inflation, interest rate, and higher taxation. Being a cash-rich, the group companies announced a dividend of PKR20bn against the net profit of PKR74,872mn with a payout ratio of 27% for FY23. Going forward, the growth is expected to stem from higher oil and gas prices due to currency devaluation, increased gains from foreign currency deposits, and improved returns on fixed-income investments amidst rising interest rates and better liquidity positions.

Courtesy – Spectrum Research