Attock Petroleum Limited (APL) announced the financial result for 1HFY22, whereby the company has posted a profit after tax (PAT) of PKR 6,609mn (EPS: PKR 66.40) against PKR 2,147mn (EPS: PKR 21.57) in 1HFY21, up by 3x YoY. On quarterly basis, earnings clocked-in at PKR 4,221mn (EPS: PKR 42.41), up by 6x YoY and 77% QoQ compared to PKR 661mn (EPS: PKR 6.64) and PKR 2,388mn (EPS: PKR 23.99), respectively. Along with the result, company announced an interim cash dividend of PKR 15.00/share in 2QFY22 compared to PKR 2.50/share in 2QFY21.

Result Highlights

· Topline during 2QFY22 settled at PKR 81,439mn, up by 82% YoY due to increasing product prices and volumetric growth of 5% YoY (MS and HSD volumes increased by 15% and 38% YoY, respectively). On a QoQ basis, the revenue surged by 12% amid hike in petroleum prices. With this, net sales during 1HFY22 jumped up by 71% YoY on account of volumetric growth of 16% YoY (volumes of MS and HSD ascended by 21% and 39% YoY).

· Gross margins of the company grew by 586bps YoY to 9.65% in 2QFY22 compared to 3.79% in 2QFY21. Higher gross margins can be attributable to higher inventory gains of PKR ~4.6bn compared to inventory loss of PKR ~550mn in SPLY, we view. On a cumulative basis, the gross margins in 1HFY22 arrived at 8.14% vis-à-vis 5.29% in SPLY due to inventory gains and volumetric growth.

· Finance cost witnessed an uptick of 7% YoY to PKR 400mn owed higher markup charged on delayed payments.

· The company recorded effective taxation at 29.58% in 2QFY22 compared to 23.33% in 2QFY21.

Recommendation

Currently, we have a ‘BUY’ call on the stock with a Dec’22 target price of 436.0/share.

Courtesy – AHL Research