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Coronavirus
VERY HIGH Source: covid.gov.pk
Pakistan Deaths
27,072
6824hr
Pakistan Cases
1,218,749
2,92824hr
5.08% positivity
Sindh
448,658
Punjab
419,423
Balochistan
32,707
Islamabad
103,720
KPK
170,391

Byco Petroleum Pakistan Limited (PSX: BYCO) had a rough FY19 where its earnings turned negative, hampered largely by the low to nil offtake of furnace oil by the power generation sector as the government announced its fuel oil curtailment plans. Moreover, staggeringly high currency depreciation took a toll on BYCO’s earnings as well. Higher cost of sales and increase in exchange losses resulted in lower gross refining margins and net margins.

However, the 1QFY20 financial performance by the company was seen as a turnaround. BYCO’s earnings more than doubled, increasing from Rs397 million to Rs871 million. Could this actually be a turnaround in BYCO’s fortunes for FY20? While it is too early to predict, it can be seen that the negative effects of currency depreciation have waned in FY20. There stability in PKR which is likely to stay in FY20 has will be beneficial to the company’s bottomline during the year.

Byco Petroleum Pakistan Limited - Unconsolidated 
Rs(mn) 1QFY20 1QFY19 YoY
Turnover - net 49,071 53,714 -9%
Cost of sales 46,985 52,033 -10%
Gross profit 2,086 1,681 24%
Administrative expenses 230 232 -1%
Selling and Dist. Expenses 104 130 -19%
Other expenses 313 180 74%
Other income 349 207 69%
Operating profit 1,788 1,346 33%
Finance costs 917 820 12%
Profit before tax 871 526 65%
Tax 0 130 -100%
Profit after tax 871 397 120%
EPS 0.16 0.07 129%
Gross margin 4.25% 3.13%
Operating margin 3.64% 2.51%
Net  margin 1.77% 0.74%
Source: PSX 

Growth in net profits for BYCO in 1QFY20 came not only from lower cost of sales and lower exchange related costs, but also lower selling and distribution costs and administrative expenses as well as slower growth in finance cost.

Also reported is the settling of a loan of Rs17 billion by the company during he period, which has helped its liquidity position.

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