NRL and ATRL in 1QFY15

There was nothing too exciting about financial performance of Attock Groups refineries for 1QFY15. Where National Refinery Limited (KSE: NRL) plunged into losses once again, Attock Refinery Limited (KSE: ATRL) slipped by almost 100 percent in earnings.
The damage started at the top when both the refineries posted a decline in revenues, about 4 percent year-on-year for ATRL, and 6 percent year-on-year for NRL. One common issue for all the refineries has been the shrinking refinery margins, where high cost of sales eats up most of the revenue gains. For NRL, what further aggravated the earnings decline was the 32 percent year-on-year contraction in other income in 1QFY15. And so NRL has been facing tough times for some time now, and it looks as though the NRLs overall operations have slowed down. Sadly for the firm, net margins also turned crimson in 1QFY15.
ATRLs performance was also unsatisfactory, as the firm posted a loss when only its refinery business is looked at. Loss from refinery operations further increased by 35 percent year-on-year due to inventory losses. However increase in other income supported the bottom line. The refinerys income from non-refinery operations has gone down by 24 percent year-on-year. But on the brighter side, however, ATRLs expansion plan of installing a new refining unit of 10,400 bpd, an isomerization plant of 7000 bpd and diesel hydrosulphurization plant of 12,500 bpd signal towards better times in the long term.

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National Refinery Limited

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Rs (mn)                     1QFY15   1QFY14     Chg

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Net sales                   49,928   52,923     -6%

Gross profit                    67    1,557    -96%

Dist. & markt. Exp             241      273    -12%

Administrative expenses        133      108     22%

Other income                   310      457    -32%

Other operating expenses         1       36    -97%

Operating profit                 3    1,596   -100%

Finance cost                   897    1,174    -24%

Profit after tax             (837)      202

EPS (Rs/share)              -10.47     2.52

Gross margin                  0.1%     2.9%

Operating margin              0.0%     3.0%

Net margin                   -1.7%     0.4%

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Attock Refinery Limited

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Rs(mn)                            1QFY15    1QFY14      YoY

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Net sales                         40,962    42,541      -4%

Gross profit                     (1,386)     (167)     730%

Other Income                         575       410      40%

Administrative expenses              123        92      35%

Distribution cost                     13        12      12%

Finance cost                         445       857     -48%

PAT (refinery operations)        (1,037)     (766)      35%

Income from non refinery op.       1,044     1,368     -24%

PAT for the period                     6       602     -99%

EPS (Rs/share)                      0.08      70.6    -100%

Gross margin                      -3.38%    -0.39%

Net margin (refinery operations   -2.53%    -1.80%

Net margin (overall)               0.02%     1.41%

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