Attock Petroleum Limited (KSE: APL) has been the largest beneficiary of the increasing petroleum sales of late. Even the September floods did not slow down oil sales, especially for APL. This augmentation in petroleum volumes can be seen in APLs revenue growth of 17 percent year-on-year in its 1QFY15 performance.
The key driver for the increasing market share has been the robust furnace oil sales by the oil marketing company. Along with improvement in furnace oil volumes growing by around 23 percent year-on-year, the firms overall product volumes increased by 14 to 15 percent in over corresponding period last year.
Among other fuels, APL was also ahead in the competition for motor gasoline (petrol) where its strong volumetric growth came from its retail expansion (new retail outlets) in the country.
However, the gains at the top were eaten away by higher inventory losses. The decline in the prices of major petroleum products like motor gasoline and high speed-diesel trampled gross margins.
While the firm booked a 6 percent year-on-year decline in its net earnings for 1QFY15, APLs volumetric prospects remain in good shape. Even though the power sectors furnace oil consumption might be facing a squeeze with the rising circular debt and the upcoming winter season, petrol and HSD projections are high. This is because of APLs strategy of increasing market share.
At the same time, the firm must be bracing for more inventory losses in the next quarter amid falling crude oil prices. Seems like tough times are nigh!
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Attock Petroleum Limited
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Rs (mn) 1QFY15 1QFY14 Chg
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Net sales 55,347 47,313 17%
Gross profit 1,937 1,948 -1%
Other income 342 321 6%
Operating expenses 621 457 36%
Operating profit 1,658 1,813 -9%
Finance Income 324 287 13%
Finance cost 42 24 73%
PAT 1,258 1,341 -6%
EPS (Rs/share) 15.17 16.17 -6%
Gross margin 3.50% 4.12%
Operating margin 3.00% 3.83%
Net margin 2.27% 2.83%
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Source: KSE Notice
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