Byco Petroleum has announced its financial results for the year ended June 30th, 2019.
The company incurred a loss of Rs. 1.68 billion for the period, while it had reported a profit of Rs. 5.01 billion in the same period last year.
The last fiscal year was tough for Pakistan’s oil sector, because of which the company faced many challenges. The gross sales of Pakistan’s biggest refinery increased by 17% from the previous year to Rs. 251 billion following an increase in oil prices and the Rupee’s devaluation. The company’s sales were increased by 19% from the previous year to Rs. 197.83 billion.
The cost of sales of the company was reported at Rs. 196.62 billion, up by 24.4% as compared with Rs. 158.05 last year. Byco Petroleum’s gross profits dropped by 78% to Rs. 1.9 billion from Rs 9.1 billion in the previous year.
The company reported a loss per share of Rs. 0.43 from EPS of Rs. 0.81.
Pakistan’s economic growth slowed considerably to a nine-year low of 3.3% in the previous fiscal year. The oil sector witnessed a 22% decline in consumption. The Rupee’s value against the US Dollar fell by more than 30% on a worsening current and trade account deficit.
The finance cost of the company was increased to Rs. 3.06 billion, up by 6.62% from Rs. 2.87 billion in the same period last year.
Due to the absence of any foreign exchange hedging mechanisms, the energy industry incurred significant foreign currency losses. Byco Petroleum booked an exchange loss of Rs. 4.19 billion even after trying to minimize its exposure to foreign currencies. But its efforts were hampered by the restrictions on the oil industry to obtain forward cover. Byco Petroleum managed refinery throughput to reduce foreign exchange losses while meeting the minimum volume commitments with its customers which pushed refinery utilization even lower.
Due to the government’s policy of fixing petroleum product prices for a month using the exchange rate of the previous month, the devaluation also hurt Byco Petroleum’s refining margins. The volatility in international commodity prices in which Motor Gasoline traded below crude oil further squeezed the refining margins.
Meanwhile, the Furnace Oil consumption continued to decline as power generation companies replaced the fuel with LNG and coal, which reduced sale volumes. Byco Petroleum also received a lower price for High-Speed Diesel, according to the criteria set by the government.
However, the company is actively working to improve its operational and financial performance, by converting all of its Light Naphtha into premium Motor Gasoline from its Isomerization Plant.
The Single Point Mooring (SPM) facility continues to provide critical support to Byco Petroleum’s refineries and is responsible for handling nearly a quarter of Pakistan’s crude oil imports.
Meanwhile, Byco Petroleum’s retail network continues to expand, with 28 new openings announced during the year, bringing the total to 379. Byco Petroleum remains committed to maintaining a high standard of safety and contributing positively towards Pakistan’s development.