Attock Refinery Limited (ATRL) has often stood out an exception in the local refinery industry as its superior product mix helps it achieve significantly better financial outcome than its peers even in the worst times. The 1HFY12 was not even half bad in terms of gross refining margins (GRMs), which helped the Company improve its profitability by a significant 55 percent year on year. ATRL, despite being engulfed in the inter-corporate circular debt managed to stay afloat in terms of refinery throughput, having marinated a 97 percent capacity during 1QFY12. There was, however, a slight decrease in total refinery output at ATRL, as the total production slid by 4 percent year on year by the end of 5MFY12. This, however, was in line with the industry-wide trend as the circular debt continued to place hurdles for refineries. The impressive top line growth came on the back of favourable scenario in international oil prices as the Arab unrest kept oil prices high during the period. The improvement in gross margins tells the tale of superior category mix at ATRL, as it mainly deals with high margin products such as motor gasoline (MS) and high speed diesel (HSD). The Companys GRMs are expected to have remained slightly above $2.5 per barrel during the period under review - significantly higher than other local players have. The profits from non-refinery operations continued to make a telling impact on the bottom line as dividends income from investment in the associate companies, particularly National Refinery Limited and Attock Petroleum Limited swelled in the 2QFY12. The income from refinery operations during the latter half of the period took a major blow, but it was more than offset by significant increase in non-refinery income. The other income also continued to increase on the back of accrued income on account of delayed payment charges form the companies from which receivables are due. The financial charges, however, were seen going up, plausibly due to exchange loss incurred during the period. The deregulated regime is a good omen for the refinery industry and the results have started to show positive signs. ATRLs product mix would continue to be its major relative strength should the oil price scenario become unfavourable. The progress on the up-gradation of the Companys refining plant is underway, but it would be too soon to call if it actually materialises as it depends heavily on uncontrollable factors, such as change in oil prices, GRMs and the government policy on deemed duty.
============================================================ ATTOCK REFINERY LIMITED ============================================================ (Rs mn) 1HFY12 1HFY11 chg ============================================================ Sales 72,303 50,615 43% Cost of sales 70,318 49,683 42% Gross profit 1,986 932 113% Gross margin 2.75% 1.84% - Finance cost 418 17 2364% Other income 1,051 753 40% PAT - refinery operations 1,209 736 64% Income from non- refinery operations 1,113 766 45% PAT 2,322 1,502 55% EPS (Rs) 27.22 17.61 ============================================================
Source: KSE notice
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