Karachi November 3 2023: Cnergyico PK Limited continued to battle with an extremely low refinery throughput which has a highly adverse impact on its financial health depicted in first quarter financial results.
The Company is currently focused on enhancing its performance and has initiated various measures to increase refinery throughput, which is crucial for driving profitability. One notable step is the adoption of processing crude oil on open credit. As part of this strategy, the Company successfully negotiated a shipment of crude oil, which recently arrived at the Company's Single Point Mooring faculty. This crude oil will be processed in the ensuing month, further supporting our efforts to improve performance.
During the period, the Government of Pakistan approved the long awaited brownfield oil refining policy for upgradation of existing / brownfield refineries. This will not only improve the overall product quality but will also attract investment in the refining sector. The policy requires several milestones / deliverables to be achieved during the upgradation phase and currently, all the refineries are working jointly with the Government to discuss and finalize the modus operandi of the policy.
The Company's net sales decreased to PKR 33.53 billion as compared to PKR 52.75 billion in the same period last year reflecting very low refinery throughput in current quarter. The gross profit in current quarter was PKR 390 million compared to gross loss of PKR 4 6 billion last year as the Company had significant inventory losses in first quarter of year 2022 due to severe rainfall and flash flooding in the area surrounding the refinery.
The increase of KIBOR rates from 15% in the same period last year to 23% in current period also increased the Company s finance cost by 90%. Consequential to the above mentioned factors the Company incurred loss after tax of PKR 2.5 billion as compared to loss after tax of PKR 6.5 billion in the same period last year.