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Attock Petroleum Limited (PSX: APL) announced its earnings for 1HFY18 last week, and the earnings for the third largest oil marketing company (in terms of volumes) were down by 11 percent, year-on-year. In the most recent quarter (2QFY18), the earnings slid by 7 percent year-on-year.

APL’s top line depicted a strong growth – revenues increasing by over 24 and 26 percent year-on-year, in 1HFY18, and 2QFY18, respectively. This growth came despite a shrink in furnace oil volumes in the period as the year-on-year volumes of motor gasoline and high speed diesel increased between 8-11 percent. Also, the company’s gross profits benefited from inventory gains, especially in the 2QFY18 owing to the increasing international oil prices. Gross margins for 2QFY18 stood at 6.42 percent, up by a 100 basis points.

Despite the revenue growth, the firm witnessed a decline in earnings, which came particularly from the absence of reversal of WWF expenses over the same period last year. Apart from that, elevated operating expenses and finance expenses also kept a lid on APL’s bottom-line growth.

The OMC announced Rs15 per share dividend along with its quarterly performance. APL’s rising retail presence and storage expansions and probable capex has kept the stock attractive for the investors. Also, a significant advantage that the company enjoys is its unleveled balance sheet and hence low sensitivity to the circular debt, giving it more room for capital expansion.

Copyright Business Recorder, 2018
 

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