Attock Petroleum posts below expectation profit

Attock Petroleum (APL) has announced its half yearly financial results, which has been termed significantly lower than market expectations.

The Company has posted profit after tax of R1.6 billion (EPS: Rs15.9), down 24.8%YoY. The below expectation result will keep the stock under pressure in the near term.

Major deviation occurred in gross profit as company recorded gross profit of Rs3.0 billion due to the lower inventory gains.

For 2QFY20, net profit was reported at Rs355 million (EPS: Rs3.6), down 71/36% QoQ/YoY, but inventory losses (estimated at Rs771 million) in the second quarter can be termed the major culprit.

Analysts believe that bulk of inventory losses were incurred on furnace oil (FO) after company’s furnace oil sales increased by 23.4%YoY, as against a decline of 22.5%YoY for the industry, with prices nosediving.

Net sales of the company declined by 1.2%YoY for 2QFY20 as volumes declined by 2.4%YoY. However, rising retail prices contained the losses.

APL booked impartment of Rs51.4 million on its financial assets during the second quarter, while short term investments plunged to Rs936.4 million as of December 2019, as against Rs2.1 billion as of September 2019.

 

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