Karachi May 1 2024: Cnergyico PK Limited reported profit of PKR 1.2 billion for the third quarter compared to loss after tax of PKR 5.1 billion in the same quarter last year.
“The prime focus of the Company had been to increase refinering throughput while maximizing refinering margins. Accordingly, refinering operations were planned keeping in view available feed stock, negligible local demand of Fuel Oil and a slump in the consumption of HSD in the country in order to ensure minimizing as best as possible company’s exposure toward pricing movements.” states company.
Gross sales increased to PKR 188 billion during July 2023 to March 2024 as compared to PKR 173 billion in the same period last year. The gross profit and operating profit in the current period clocked in at PKR 8.2 billion and PKR 6.7 billion, respectively, compared to a gross loss and operating loss of PKR 10.3 billion and PKR 5.8 billion in the same period last year.
The average policy rate set by the central bank increased from 17% last year to 22% in current year leading to a 57% increase in the Company’s borrowing cost. Such elevated financing rates pose sustainability challenges for any business over the long term and we look towards the Government and the State Bank of Pakistan for a downward revision so that the businesses are able to operate sustainably.
After accounting for the substantial interest expense as mentioned above, the Company earned profit after tax of PKR 1.2 billion in third quarter compared to loss after tax of PKR 5.1 billion in the same quarter last year. For cumulative period of July 2023 to March 2024, the Company incurred loss after taxation of PKR 417 million as compared to loss after tax of PKR 10.5 billion in the same period last year. We look forward to further improvement in succeeding period. The basic I diluted loss per share amounted to PKR. 0.08 as compared to basic (Restated) | diluted loss per share of PKR 1.94 and Rs. 1.91 respectively in the same period last year.
During the period under review, petroleum marketing business also performed well and added segment profit of PKR 1.9 billion as compared to PKR 901 million in the same period last year. This has resulted due to increase in notified margins of HSD and PMG products during the period and better sales outreach and inventory management.
The Government had introduced “Pakistan Oil Refining Policy for Upgradation of Existing / Brownfield Refineries 2023” which was approved in August 2023 and was amended in February 2024 to address the concerns of the refineries. After detailed deliberation, Cnergyico has agreed on draft of the Uprade Agreement with the Oil & Gas Regularity Authority (OGRA) and awaits OGRA’s instruction in this respect.
