Shell Pakistan Limited has announced financial results for the 2nd quarter that ended on June 30th, 2020.
The company’s losses increased by 108.25% to Rs. 3.54 billion as compared to a loss of Rs. 1.70 billion in the same period last year. This took the total half-year losses to Rs. 7.87 billion as compared to a loss of Rs. 1.44 billion recorded in the same period of 2020
According to the company’s statement, Q2 was a challenging quarter for the industry, COVID-19 lockdowns severely impacted volume. Although the lockdown measures have been recently eased by the Government, Oil Marketing Companies in Pakistan still experienced a reduction in oil consumption.
Pakistan’s Motor Gasoline volumes fell by 7% while High-Speed Diesel volumes fell by 9% compared to the same period last year. This declining trend in volumes also impacted SPL and had a significant effect on its financial performance.
During this quarter, the crude oil also reached a new low of $19/barrel in April 2020. The oil industry felt the impact of this volatility in oil prices. This sharp decrease in the oil prices resulted in exceptionally high inventory losses at Shell Pakistan which have significantly impacted its financial performance.
During the second quarter, the company’s net sales were decreased by 47% to Rs. 29.63 billion as compared to Rs. 55.56 billion in the same period of last year owing to the COVID-19 pandemic lockdown in the country.
However, the cost of sales was reported at Rs. 31.63 billion, down by 37.07% as compared with Rs. 50.26 billion in the same quarter in 2019. Even this couldn’t save the company from booking a gross loss of Rs. 1.99 billion as compared to a gross profit of Rs. 5.29 billion last year.
Shell’s other expenses decreased by 99.50% to Rs. 16.42 million, as compared to Rs. 2.84 billion recorded in the same period last year. Administrative expenses saw a decrease of 7.55% to Rs. 1.47 billion as compared to Rs. 1.59 billion in the corresponding period of the last year. Distribution and expenses decreased by 30.43% to Rs. 1.28 billion from Rs. 1.84 billion.
However, other income increased to Rs. 888.89 million, up by 8.8x as compared to Rs. 98.53 million in the same period last year. Finance cost saw an increase of 7.60% to Rs. 426 million as compared to Rs. 396 million last year.
Shell Pakistan reported a loss per share of Rs. 33.13 during the second quarter of 2020. It had reported a loss per share of Rs. 15.93 in the same period last year.
On the flip side, the company booked a net tax benefit of Rs. 471.78 million during the quarter under view.
According to the company’s statement, Shell Pakistan is focused on playing a key role in developing Pakistan’s energy future and remains committed to improving its financial performance, while ensuring safety and compliance.