If the acquisition of the local downstream business of the global giant Chevron goes through well, Attock Petroleum will celebrate and why not? The Companys cash rich balance sheet will be adorned with more than 500 retail outlets, formerly held by Chevron.
However, the current mood at APL is bound to be more sojourn given its performance during the first half of FY13. The downstream oil market player reported a rather flat top line and a receding bottom line, for that period.
In the latest announcement on KSE, the core revenues of the oil marketing company were seen to have moved up by five percent YoY during 1HFY13 despite muted volumetric growth. Most of this increase came from inventory gains and better product prices particularly during 1QFY13.
Though the sales could have benefited largely from the rise in demand for petrol due to the CNG shortage and the pricing issue in the country, the lacuna in its motor spirit sales was the ban on exports, particularly to Afghanistan.
Also, the company should have seen better Asphalt sales since infrastructural activities have gained traction in the run up to elections. Call it misfortune or the cost of the state of law and order; sales revenues have not benefitted from higher spending on infrastructure projects.
The bottom line of Attock Petroleum Limited diluted due to higher operating expenses and unlike the gross margins which improved during 1HFY13 vis-à-vis 1HFY12, the net margin shrank. The net profit of APL for 1HFY13, contracted by three percent YoY and by more than 20 percent YoY during second quarter of FY13 alone.
The revenues and profits might not be whopping this season, but the Company has many reasons to be optimistic and cheerful. For one, the proposed acquisition of Chevrons local assets will increase its presence and market penetration.
Also, the likely boost in the Asphalt sales due to the upcoming elections and APLs relatively low exposure to circular debt due to low leverage makes the outlook bright in coming months.
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Attock Petroleum Limited
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Rs (mn) 1HFY13 1HFY12 Chg 2QFY13 2QFY12 chg
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Net sales 78,141 74,521 5% 41,569 38,587 8%
Gross profit 2,914 2,493 17% 1,127 1,276 -12%
Operating expenses 802 375 114% 449 217 106%
Finance cost 778 575 35% 399 345 16%
PAT 2,155 2,218 -3% 864 1,120 -23%
Gross margin 3.7% 3.3% 2.7% 3.3%
Operating margin 4.5% 4.5% 3.3% 4.6%
Net margin 2.8% 3.0% 2.1% 2.9%
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Source: KSE Notice