Byco Petroleum Pakistan Ltd. (BPPL) has announced its financial results for the half-year ending 31 December 2019.
The company has reported an unconsolidated profit of Rs. 213.9 million during the first half-year, from a loss of Rs. 464.67 million last year, according to the notification to the Pakistan Stock Exchange.
During this period, the company’s gross sales were recorded at Rs 125.6 billion from Rs 123.4 billion in the corresponding period of 2018. Overall net sales were recorded at Rs. 94.63 billion, down by 5.46% as compared to Rs. 100.09 billion posted in the same period last year.
The company’s gross profits climbed to Rs. 2.5 billion from Rs 1.45 billion a year earlier, showing an increase of 72.41%. The company improved refinery margins by converting nearly all Naphtha volumes into Motor Spirit and successfully implemented various cost-saving measures. The improvement in the value of the Pakistani Rupee against the US dollar also had a positive impact on the results.
Earnings per share of the company were reported at Rs. 0.04 from Rs. 0.02.
In 2QFY20 Pakistani consumption of petroleum products fell due to the slowing economy. Prices of High
Sulfur Furnace Oil (HSFO) fell sharply in international markets while the commodity’s demand also remained low in Pakistan.
Crack spreads for other refined products narrowed which pushed margins into negative territory by the end of the period. Finance costs also increased as KIBOR rates climbed to 13.49% in December 2019 from 10.8% a year earlier. A modest recovery was seen in HSFO prices after the reported quarter but they were still below crude oil prices.
The company stated that it is actively managing costs, optimizing cash generation, improving profits, while continuing to find ways to drive future growth. Byco Petroleum and other oil refineries have been discussing the issue of low upliftment and weak prices of HSFO with the Government and hope to achieve a resolution that will be feasible for all stakeholders.