Where the higher oil prices were received joyfully by the E&P sector during FY12, the volatility in the international crude oil prices continued to induce unpredictability in the domestic refinery operations.
Being the only integrated oil and gas company in the country, the Attock Group benefits greatly from the synergies and portfolio even amid uncertain outlook for refinery and OMC margins. Moreover, it also helps the group in standing somewhat stable to the ongoing energy crisis and the circular debt tangle.
Though the performance of the individual companies varied drastically during FY12 against such volatile backdrop, all member companies (POL, APL, ATRL and NRL) surpassed the already high payout expectations. On the whole the groups profits declined by 10 percent YoY.
The healthy revenue growth of the oil marketing member, Attock Petroleum Limited during FY12 versus comparable period echoes favourable price and volume mix. However, the growth in the top line did not transcend well to the bottom and the net earnings of the company contracted by 3.2 percent YoY.
Subdued earnings branched out primarily from the absence of inventory gains, lower OMC margins and exchange losses translating into a 77 percent YoY increase in finance cost.
In the refining sector, the performance of the two refineries, Attock Refinery Limited and National Refinery Limited, was in stark contrast. The former gained significantly from the non-refinery operations, while high cost and dwindling margins become the fate of the later.
Attock Refinerys revenues climbed by a healthy 33 percent YoY during FY12, and supported the bottom line together with an ample rise in payouts from the associate companies. Where the companys refinery operations were more or less flat during the year, a significant portion of income from its non refinery operations saved the company during times of volatility. On the whole, the refinerys earnings increased by 25 percent YoY during FY12.
Sadly, the cowed base oil and lube market globally during the first part of the year wreaked havoc on the only lube refinery, reflected by a sizeable drop in the bottom line. The gross margins and the net margins during FY12 lost substantial 400 and 300 basis points respectively YoY due finance cost and higher taxation.
However, following the group trend and historical drift, NRL tried to keep the investor interest by announcing a final cash dividend of Rs15 per share for FY12.
The start of FY13 has been sanguine for the two refineries so far, as the sales during July 2012 surged by six percent with ATRL and NRL being the primary reason behind higher sales. Going forward with better product mix and relative resistance to the circular debt menace, investor interest remains intact.
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Refineries & OMC - Attock Group Limited
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Rs (mn) FY12 FY11 Chg
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APL
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Net sales 152,843 109,395 40%
Gross profit 4,588 4,714 -3%
Operating profit 6,358 6,082 5%
Profit for the year 4,120 4,257 -3%
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ATRL
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Net sales 154,382 116,388 33%
Gross profit 2,019 1,497 35%
PAT-Refinery 1,146 1,117 3%
Net income-Non-refinery 1,589 1,068 49%
Profit for the year 2,735 2,186 25%
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NRL
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Net sales 174,797 148,558 18%
Gross profit 4,722 10,007 -53%
Operating profit 5,794 10,179 -43%
Profit for the year 2,618 6,569 -60%
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Source: KSE Notice
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