Although the National Refinery Limiteds (NRL) top line witnessed a decrease, yet the bottom line registered a whopping 105 percent increase. This was attributable to several factors, primarily improving margins, and the result is consistent with the four times increase in earnings the company witnessed for 9MFY16 as compared to the same period last year.
The increase in margins was brought about by reducing operating costs such as cost of sales as well as distribution and marketing expenses. Indeed, the cost of sales has decreased by 45 percent, which has improved margins massively and resulted in a gross profit increment of almost 60 percent. The stellar bottom line has led the EPS to increase by more than double from Rs46.38 to Rs96.14.
Of its two segments, it is the lube segment that has proved to be more reliable in profit contribution as NRL is the only player in the lube industry of Pakistan. Furthermore, the company has also turned its loss incurring fuel segment into profitability because of higher margins, improved production as well as lower exchange rate loss due to stable rupee-dollar parity.
In addition, NRL has reduced its financing costs this year by almost 68 percent year-on-year, which has also translated into a healthier bottom line.
NRL also has ambitious expansion and up-gradation plans for the future with the work being divided in two phases. The company is undergoing up-gradation of its plant to comply with government directives to produce environmental friendly HSD and meet Pakistans rising demand of motor gasoline.
A two stage unit at Lube-1 refinery has been planned to augment the installed crude oil processing capacity from 12,050 barrel per stream day (bpsd) to 17,000 bpsd and vacuum fractionation capacity from 5,200 bpsd to 6,600 bpsd.
Comments
Comments are closed.