Karachi February 11 2021: During the first half of financial year 2022, National Refinery Limited earned profit after tax of PKR 2,550 million resulting in earning per share of PKR 31.89 as compared to loss after tax of PKR 823 million that had resulted in loss per share of PKR 10.29 in the corresponding period, as per information submitted by the company at Pakistan Stock Exchange (PSX).
Throughput of fuel refinery operations slightly declined to 66 percent as compared to 68 percent in the corresponding period.
Fuel segment of the company incurred loss after tax of PKR 971 million as compared to loss after tax of PKR 1,770 million in the same period last year. Gross Refining Margins remained better during the second quarter due to increase in economic activities around the world. International Oil Prices also showed a steady upward trend owing to rising demand of petroleum products. However, continuous devaluation of Pak Rupee against US Dollar during the period translated into significant exchange loss of PKR 2,044 million as compared to exchange gain of PKR 525 million in the corresponding period. Sale of Furnace oil declined due to lesser demand of electricity during second quarter which adversely affected the performance of fuel segment. Sharp decline in prices of petroleum products towards the end of the period because of emerging omicron threat compelled the refinery to record write down in inventory valuation at period-end by PKR 926 million (June 30, 2021: PKR 34 million) aggravating loss from fuel refinery operations. The Company commenced turnaround of Fuel Refinery and its associated units on December 24, 2021 as per plan, which has been successfully completed during January 2022.
Lube Segment earned profit after tax of PKR 3,521 million as compared to profit after tax of PKR 947 million during the corresponding period last year. Improvement in sales volume and prices have been witnessed due to restoration of economic activities globally that resulted in better financial results of lube segment. Due to lower demand of Bitumen in local market, the Company exported 21,893 M.Tons of Bitumen during the period as compared to 3,892 M.Tons in the corresponding period. Lube segment was operated at 87 percent as compared to 75 percent during same period last year.
The profitability also includes impact of appeal effects issued by Federal Board of Revenue in relation to prior tax years amounting to PKR 2,089 million.
Company’s working capital financing requirement has increased considerably due to increase in crude oil prices and levy of sales tax on crude oil purchases. Downward adjustment of sales tax on petroleum products by the Government slowed down the recovery of sales tax adding to the requirement of working capital. Upward revision in policy rate during the period also added in increased mark-up expense. Resultantly, Company’s total mark-up expense during the six months’ period is PKR 1,112 million as compared to PKR 753 million in the corresponding period.
National Refinery together with other refineries has taken up the issue of slow upliftment of Furnace oil in addition to ongoing discussion with the Government seeking some relief for sustainable refinery operations and future upgradation. The Government is currently reviewing the proposals and the Company expects some progressive measures including approval of draft refining policy.
National Refinery Limited ( NRL ) was incorporated on August 19, 1963 as a public limited company. Government of Pakistan took over the management of NRL under the Economic Reforms Order, 1972 under the Ministry of Production, which was exercising control through its shareholding in State Petroleum Refining and Petrochemical Corporation (PERAC).
The Government of Pakistan had decided to place the National Refinery Limited under the administrative control of Ministry of Petroleum & Natural Resources in November 1998.
In June 2003 the Government of Pakistan decided to include NRL in its privatisation programme. The selling of 51% equity and transfer of management control to a strategic investor had been proposed accordingly, the due diligence process for the privatisation was initiated. After competitive bidding NRL was acquired by Attock Group in July 2005. The Company has been privatised and the management control handed over to the new owner Attock Group on July 7, 2005.
