Byco Petroleum Limited (PSX: BYCO) has seen hideous times in FY20 as did the rest of the refining segment in the country. Losses for the company significantly increased year-on-year standing over Rs2 billon for the fiscal year.

From tanking furnace oil offtake by the power sector and rising inventories of the same with the refinery; higher interest rates; currency depreciation; falling oil prices; and COVID-19 pandemic eating away the remaining demand contributed to the company’s losses. Though the refinery continued to operate till March end 2020, it had to slowdown and eventually put the refinery on cold circulation due to very lean demand in local market in the subsequent months of FY20.

From how things were in the FY20 particularly due to COVID, FY21 seems to have started off on a better note for BYCO as the economic activity has resumed and volumetric growth has been witnessed. However, on a year-on-year basis, the company’s earnings have slipped by 44 percent.

BYCO’s revenues declined by 32 percent year-on-year in 1QFY21, which was primarily due to 30 percent decline in the oil prices internationally. Gross profits for BYCO were seen falling by 18 percent, and apart from the decline in sales, it was partly due to exchange gains from currency appreciation in 1QFY20 last year. And despite a decline in finance costs that were a key factor in dragging the company’s earnings inFY20, BYCO’s earnings skidded during 1QFY21.

Coming quarters, however, will decipher what path BYCO’s profitability takes. FY20 was also a very volatile year in that sense; the company’s profitability shows some recovery in 1QFY20 after a weak FY19; followed by colossal losses in second and third quarters; and then some recovery in 4QFY20 again.