Refinery: NATIONAL REFINERY LIMITED - Nine Months Ended March 31, 2007

National Refinery Limited was incorporated as a public limited company at Karachi in 1963. Government of Pakistan had taken over the management of the company under Economic Reforms Order, 1972.
NRL is a petroleum refining and petro-chemical complex producing a wide range of fuels, lubes, BTX (petro-chemicals), asphalts and specially products for domestic consumption and export. It is located on a plot comprising 263 acres in the Korangi Industrial Area of Karachi.
In July 2005, under the government initiative for privatisation of 51% equity and transfer of management, NRL was taken over by Attock Oil Group. As regards its project history at a glance, First Lube Refinery was commissioned in June 1966 and after eleven years in April 1977 its fuel refinery was commissioned. The BTX unit started in April 1979 and second lube refinery was commissioned in February 1999. Fuel refinery revamp was performed in 1990, 1995 and 1997.
During the nine months ended March 31, 2007 (9M 06-07) the company generated net sales at Rs 65.061 billion as compared to Rs 59.611 billion posted in the same period last year (SPLY). The fuel business segment contributed 77% of the company net sales in the period under review whereas 23% of sales came from lube segment.
But segment results after tax shows altogether different picture as during the period under review, the fuel segment booked loss at Rs 271.55 million and lube business segment registered profit at Rs 2,670.20 million. The lube segments profit also registered 71.5% increase against Rs 1,556.74 million in the SPLY. According to the Directors' review which emphasised that lube segment played a key role in earning higher profitability.
During 9M 06-07, the company's net profit after taxation amounted Rs 2.399 billion as against Rs 1.978 billion in the previous corresponding period 9M 05-06 registering commendable growth of 21.2%. The directors seem to appreciate as this performance was achieved despite the adverse global business environment in the early part of the period under review. As regards lube segment's performance as mentioned earlier, key factors that contributed to the lube segment's improved profitability were improved gross refining margin (GRM) and increase in sales by 20% year on year basis.
They informed that Q3 06-07 profitability of fuel segment was positive but on year to date basis (9 months) fuel segment profitability remained negative. Production and sales of HSD, one of the major products, was lower by 11.41% and 8% respectively on year to year basis. About the reasons of decline, they recalled that it was discussed in the previous quarterly report.
The company's Deputy Chairman & CEO also stated that the process of finalisation of pricing structure, for diesel de-sulphurisation was still under discussion with the government.

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Performance Statistics                (Million Rupees)

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Balance Sheet                                  -As At-

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                                March 31       June 30

                                    2007          2006

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                               Unaudited       Audited

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Share Capital Paid-up:            666.39        666.39

Reserves:                      10,276.16      8,710.33

Shareholders Equity:           10,942.55      9,376.72

Retirement Benefit Obligations:   242.13        175.35

Current Liabilities:           18,441.39     15,370.47

Fixed Assets-Tangible:          2,320.41      2,286.75

Intangible Assets:                  2.66         10.63

Deferred Taxation:                280.46        268.99

L.T. Loans & Deposits:             64.35         61.93

Current Assets:                26,958.01     22,294.24

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Total Assets:                  29,626.07     24,922.54

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Profit & Loss A/c for Nine Months Ended     -March 31-

                                    2007          2006

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Net Sales:                     65,061.46     59,610.89

Gross Profit:                   3,792.70      3,125.36

Other Operating Income:           626.32        588.75

Operating Profit:               3,628.70      3,031.63

Finance (Cost):                     6.26          2.46

Profit Before Taxation:         3,622.44      3,029.17

Net Profit After Taxation:      2,398.81      1,978.30

Earnings Per Share (Rs):           36.00         29.69

Share Price (Rs) on 25/07/07:     396.95             -

Price/Earning Ratio:               11.03             -

Debt/Equity Ratio:                 0:100         0:100

Current Ratio:                      1.46          1.45

Gross Profit Margin (%):            5.83          5.24

Net Profit Margin (%):              3.68          3.32

R.O.A. (%):                         8.10          7.94

R.O.C.E. (%):                      21.45         20.71

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PRODUCTION CAPACITY:
NOTE"The actual capacity of the battery plant cannot be determined as it depends on the proportion of different types of batteries produced which varies in relation to the consumer demand.
The installed capacity of the chemical plants is 33,000 MT (2006: 33,000 MT) per annum. The company's production during the year was according to market demand."
COMPANY INFORMATION: Chairman: Ghaith R. Pharaon; Dy. Chairman & Chief Executive Officer: Shuaib A. Malik; Director: Abdus Sattar; Chief Financial Officer & Company Secretary: Enver A. Ferzan; Registered Office & Refinery: Korangi Industrial Area Karachi; Website: www.nrlpak.com
Copyright Business Recorder, 2007