Profits of Shell Pakistan Limited (PSX: SHEL) stood at over Rs1.3 billion during the 1HCY24. This translates into a big jump for 2QCY24 earnings when compared to the first quarter of the year where the second quarter alone contributed a billion Rupees. While the company witnessed a quarter-on-quarter growth in earnings, the overall bottom line for 1HCY24 was down by 63 percent year-on-year. Also, when the latest quarter (2QCY24) is compared to a similar period last year, the earnings were seen falling significantly as well.
The fall in the company’s earnings was primarily due to higher costs amid an inflationary period in the country. Revenues were seen climbing during the period. SHEL’s topline for 1HCY24 was up by 4 percent year-on-year, while that in 2QCY24 was higher by 9 percent year-on-year as volumetric sales were higher and market share was intact. However, gross margins for the company fell drastically due to a more than proportionate increase in the cost of sales. The company managed to reduce its operation expenses primarily driven by lower other expenses.
Where the share of profits of associates supported SHEL’s bottom line, the earnings of the company were adversely impacted by lower other income and minimum tax differential.
Last year, the parent company of Shell Pakistan Limited had expressed its intent to sell its shareholding in SPL in a bid to reorganize its global business. It was later informed that the shareholding would be sold to Wafi Energy Holding Limited. The process is underway and the company is actively playing its role in giving back to the community.
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