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Attock group posts mixed results

KARACHI, April 16: The Attock group announced quarterly results for the listed companies under its fold: Pakistan Oilfields (POL); Attock Refinery (ARL) and Attock Petroleum (APL). Investors were not quite enthused by the financial figures, where except for the APL, others turned out to be below market expectations.

The POL stock price plunged by Rs16.14 to Rs456.24; share in ARL dipped by Rs9.72 to Rs184.79 and the APL stock rose by Rs1.13 to Rs492.57. The results of the three entities were as follows:

Pakistan Oilfields Ltd (POL): The company posted profit after tax (PAT) amounting to Rs8.62 billion for the 9MFY13, translating into earnings per share (eps) at Rs36.46, down 7.6 per cent from Rs9.33bn and eps at Rs39.44 in same period last year.

The drop in earnings was attributed to: Decline of 2pc in company’s topline, huge increase in exploration expenses and 16pc drop in other income owing to reduced payout from NRL and APL Net sales decreased 3pc YoY to Rs23.02 on account of lower production oil and gas production (down by 5pc YoY and 16pc YoY respectively). However, depreciation of 8pc in rupee restricted the fall in topline.

Subdued oil and gas production was the major culprit behind the subdued topline. During 9MFY13, company’s oil production was down 4pc while gas flows were down by 15pc. Rise in company’s exploration expense was on account of higher seismic activity as company did not book any dry well. Decline in other income was due to reduced dividend announcement from its assosciate companies. Going forward, commissioning of Makori CPF was thought to be the major trigger for company.

The share in POL has underperformed the broader KSE-100 index by 3.8pc over the past 3 months.

Attock Refinery Limited (ATRL): The company announced 24pc increase in PAT a Rs3.2bn (EPS of Rs37.94) in 9MFY13 as against earnings of Rs2.6bn (EPS of Rs30.62) in the corresponding period last year. The results were lower than market expectations.

During the nine months, ATRL revenues rose 10pc YoY to Rs123bn. At the same time, gross profits increased by 47pcYoY owing to better Gross Refining Margins (GRMs) during the period. In 3Q alone, the refinery booked a Gross Loss of Rs632mn compared to a Gross Profit of Rs985mn in 2QFY13.

Growth in earnings in 9MFY13 primarily stem from better refinery operations on the back of higher GRMs (Gross Refining Margins) scenario and other incomes. Company’s core-refinery income stood at Rs22.7 during 9MFY13, up by a significant 89pc from last year. During 9MFY13, earnings from non refinery operations declined by 18pc to Rs15.2 per share due to reduced dividends from NRL and APL. Attock Petroleum Ltd (APL): posted 9MFY13 PAT at Rs2.95 bn or eps of Rs42.6, down 6pc from Rs3.147bn or eps at Rs45.5 recorded in the same period last year. The company did not announce an interim dividend along with the result which was not expected either. The results were lower owing to depressed gross margins. The decline in bottomline was led by the surge of 89 per cent in operating expenses to Rs1.13bn from Rs595m. Topline of the company was 6pc higher YoY backed by better product pricing during 1HFY13. Significant inventory gains during 1QFY13 led to 8pc higher gross profit in 9MFY13.

Despite a slightly improved volume for the aggregate 9MFY13 period coupled with higher margins and stable pricing, the same could not be translated down to the bottom line due to higher cost of sales. Effective tax also stood lower for the period (3QFY13) at 29pc against almost 33pc for the corresponding period last year (3QFY12).

APL has announced participation in the bidding process for Chevron Marketing Affiliates, which could increase company’s market share going forward.