An 8 percent year-on-year decline in earnings for 1QCY19 by Hascol Petroleum Limited (PSX: HASCOL) doesn’t look flattering, but the oil marketing company that has posted a comeback from its quarter-on-quarter declining performance. The 4QCY18 was bleeding for HASCOL as the company posted a loss of Rs1.3 billion, and compared to that, earnings of Rs675 million in the latest quarter is definitely as rebound.
On a year-on-year basis, the OMC’s revenues declined by 11 percent, and volumetric growth too remained sluggish; key fuels like furnace oil, HSD and motor gasoline volumes slipped by 39 percent, 26 percent, and 10 percent, respectively. However, inventory gains during the quarter lifted gross margins and hence the net margins.
Also, during he quarter, the finance cost of the company witnessed over three times increase, which came from increase in long term financing obtained back in December 2018 along with higher interest rate environment. On the exchange loss side, the situation was better due to only 1 percent currency depreciation during 1QCY19.
While HASCOL ended up with a decline in its earnings growth in 1QCY19 on a year-on-year basis, it seems that the company has come out of the loss zone. The company is hopeful to commission its lube blending plant in June this year, which will give a boost to its lube sales. It is also aggressively developing its storage infrastructure and retail network.
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