FY14 was a decent year for Attock Petroleum. However, the year proved out to be not as good as the analyst community had anticipated. The financial results of Attock Petroleum (KSE: APL) depicted an increase of 11 percent year on year in its bottom line.
With rapid expansions in its retail network, the company seems to be reaping the fruits of consistent CNG shortages in the country which is reflected in its strong retail sales volume. During nine months ended FY14, APL added 35 new outlets taking the total network to 449 outlets. Thanks to the enduring gas shortages, power producing companies are compelled to increase their reliance on the use of furnace oil, which is a positive wave for the company. Led by healthy volumetric sales growth in all products, net sales flattered an upsurge of 25 percent year on year in FY14.
Despite strong top line growth, burgeoning inventory losses kept a lid on expansion in gross margins which remained the primary victim of denting the bottom line growth. Moreover, the drop in finance income by a massive 61 percent was offset, to a great extent, by a significant improvement of 92 percent in finance charges.
Plunging finance costs is the result of downtick in companys receivables as escalating receivables fuels the need to settle on short-term financing to facilitate working capital finance requirements.
The development of bulk oil terminal at Mehmood Kot is anticipated to fuel APLs storage capacity which in turn will lend a hand in meeting the ever increasing demand of APLs petroleum products. Also, with its growing retail footprints, fate of the company looks rosy.
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ATTOCK PETROLEUM LIMITED
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Rs (mn) FY13 FY14 chg
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Net Sales 164,710 205,163 25%
Cost of Sales (159,533) (199,221) 25%
Gross Profit 5,177 5,942 15%
Other Income 1,164 1,376 18%
Operating Expenses (1,468) (1,937) 32%
Operating Profit 4,873 5,381 10%
Finance Income 2,750 1,068 -61%
Finance Cost (1,666) (134) -92%
Share of Associate Profit 46 25 -46%
Other Charges (410) (434) 6%
Profit Before Taxation 5,593 5,906 6%
Taxation (1,687) (1,579) -6%
Profit After Taxation 3,906 4,327 11%
EPS (Rs.) 47.10 52.16
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Source: KSE notice
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