Attock Petroleum Limited is an oil marketing company formed by the Attock group, a large conglomerate with a footprint in the oil, power generation, cement, and IT sectors.
The Attock group has a strong presence in the upstream and downstream oil sector, covering exploration, refining, marketing, and distribution.
Attock Petroleum Limited (APL) is the country’s third largest oil distribution company, and claims increased market share of 9.1 per cent for the year ending June 2012, while overall industry volumes fell to 19.4 million tonnes, from 20.3 million tonnes in the previous year.
The company is currently conducting due diligence on the possible buyout of Chevron’s Pakistani (Caltex) and Egyptian assets.
Registered in 1998, APL deals in the distribution of furnace oil, high speed diesel, light diesel oil, premier motor gasoline, kerosene, asphalt, and lubricants. The company supplies these products through 367 retail outlets, along with supply to corporation on contract.
The company states that the whole industry was negatively affected by a ban on export of petroleum products to Afghanistan, along with lower consumption by the power sector due to circular debt.
However, Premium Motor Gasoline saw a spike in consumption, which is attributed to a CNG supply gap and its use as backup fuel. In the first quarter of the financial year of 2013, the company also began its supply of jet fuel and petroleum to the Pakistan Air Force and the Pakistan Army.
In 2012, total revenue stood over Rs152 billion, an increase of almost 40 per cent over 2011. That being said, the first quarter of 2013 saw a two per cent rise in sales value, in spite of a six per cent fall in volume from the corresponding period last year. Operating profits also grew to Rs6.36 billion in 2012, a year-on-year (YoY) increase of 4.53 per cent. Operating profit in the first quarter of 2013 stood at Rs2.15 billion, a 33 per cent increase from the same period of the corresponding year.
The company this year has paid cash dividends of Rs50 per share, consisting of an interim dividend of Rs17.50, and a final dividend of Rs32.50, although EPS (earnings per share) had decreased to Rs59.61 in 2012 from Rs61.58 in 2011. Overall dividend payout, however, increased from Rs2.868 billion in 2011 to Rs3.456 billion in 2012.
Profit After Tax (PAT) declined by 3.2 per cent on a YoY basis to Rs4.12 billion. However, PAT saw a rise by almost 18 per cent quarter-on-quarter (QoQ) in 2013.
While top-line contributors improved, the decline in 2012 can be attributed to lower investment income, lower profit shares from associated companies, and higher financial charges. Financial charges (non-debt) grew by 77.4 per cent in the same period, which the company’s financial statements have attributed to an increase in late payment charges.
That being said, the company’s gross profit margin (GP as a percentage of sales) declined on a YoY basis, from 4.31 per cent in 2011 to three per cent in 2012. Net profit margins also declined to 2.70 per cent, from 3.89 per cent in the previous year. Thus, return on equity came down to 34.44 per cent from 40.96 per cent in the previous year.
The company’s liquidity position remains consistent, with cash and equivalents rising to Rs6.8 billion from Rs6.03 billion last year.
Although the company’s current ratio has dropped to 1.58x from 1.76x last year due to the circular debt ratio, the company has kept its quick ratio stable at 1.35x, unchanged from 2011.
The company’s inventory turnover has declined from 33.5 times in 2011 to 31.5 times in 2012. However, this could also be attributed to additional storage capacity of the company. Number of days in receivables has increased from 28 in 2011 to 29 in 2012.
The company has no bank borrowings, thus does not hold any debt in its balance sheet and has no financial leverage. It’s current break-up value is Rs179.16 per share, up from Rs167.05 last year.