ANL 33.80 Increased By ▲ 1.05 (3.21%)
ASC 15.13 Increased By ▲ 0.75 (5.22%)
ASL 25.50 No Change ▼ 0.00 (0%)
AVN 95.50 Decreased By ▼ -0.20 (-0.21%)
BOP 9.17 Increased By ▲ 0.02 (0.22%)
BYCO 10.23 Increased By ▲ 0.25 (2.51%)
DGKC 137.50 Increased By ▲ 2.20 (1.63%)
EPCL 51.62 Increased By ▲ 0.37 (0.72%)
FCCL 25.00 Increased By ▲ 0.31 (1.26%)
FFBL 25.45 Increased By ▲ 0.95 (3.88%)
FFL 15.70 Increased By ▲ 0.28 (1.82%)
HASCOL 10.90 Increased By ▲ 0.18 (1.68%)
HUBC 86.75 Increased By ▲ 0.01 (0.01%)
HUMNL 7.10 No Change ▼ 0.00 (0%)
JSCL 27.04 Increased By ▲ 0.45 (1.69%)
KAPCO 40.00 Increased By ▲ 0.80 (2.04%)
KEL 4.15 Increased By ▲ 0.04 (0.97%)
LOTCHEM 14.80 Increased By ▲ 0.08 (0.54%)
MLCF 47.59 Increased By ▲ 0.75 (1.6%)
PAEL 38.30 Increased By ▲ 1.20 (3.23%)
PIBTL 11.91 Increased By ▲ 0.08 (0.68%)
POWER 10.70 Increased By ▲ 0.20 (1.9%)
PPL 90.97 Decreased By ▼ -0.53 (-0.58%)
PRL 27.45 Increased By ▲ 1.63 (6.31%)
PTC 8.81 Decreased By ▼ -0.09 (-1.01%)
SILK 1.40 No Change ▼ 0.00 (0%)
SNGP 43.75 Increased By ▲ 2.68 (6.53%)
TRG 147.70 No Change ▼ 0.00 (0%)
UNITY 31.20 Increased By ▲ 0.72 (2.36%)
WTL 1.52 Decreased By ▼ -0.02 (-1.3%)
BR100 5,016 Increased By ▲ 30.84 (0.62%)
BR30 26,130 Increased By ▲ 297.73 (1.15%)
KSE100 46,158 Increased By ▲ 193.53 (0.42%)
KSE30 19,308 Increased By ▲ 71.8 (0.37%)

FY20 has been an exceptionally challenging year for businesses – more so for the oil and gas refining sector. Not only did the coronavirus pandemic in the 2HFY20 hit the sector hard, slower economic growth in the fiscal year leading to lower overall petroleum consumption, the furnace oil crisis and crashing oil prices also weighed heavy on the sector’s profitability. But apart from these exogenous factors, the state of the refineries in the country and their inability to upgrade all these years has been a key factor in the debilitating downstream oil refining sector.

Atock Groups’ two refineries - Attock Refinery Limited (PSX: ATRL) and National Refinery Limited (PSX: NRL) are part of the only four listed refineries. Profitability of these refineries has nose-dived, and the earnings continued to run into losses in FY20 after a weak FY19. The only positive thing about FY20 performance is that their losses halved on a year on year basis.

Attock Refinery posted a loss after tax of Rs2.8 billion, which was lower by 48 percent year-on-year from FY19. And National Refinery Limited, which is also a lube refinery posted a loss after tax of over Rs4 billion for FY20, which was 53 percent year-on-year lower than the losses incurred in FY19. While the revenues of the two refineries continued to fall, the decline in losses for ATRL stemmed primarily from over 80 percent decline in finance cost. However, for NRL, a look at loss before tax shows that the losses increased by over 35 percent year-on-year in FY20 despite a decline in finance cost.

A key issue for the two refineries has been the FO upliftment and reduction in its price in FY20. And then the impact on operations because of COVID-19 and the related restrictions in the country. Attock refinery had to reduce its capacity to minimum (around 20-30%), while NRL was forced to halt operations and close the refinery temporarily during the year.