Karachi January 25 2022: Once its finances are restructured, the Company has the capacity to generate sizable EBITDA and net profits even on relatively low volumes according to report published by the company.
Subsequent to the year end, the Company has already started addressing disclaimers in the audit report and is aiming to close reconciliation of ledgers, fixed asset tagging and valuation in the accounts for the year ending 31 December 2021.
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The reconstituted Board and new management formulated a business revival and financial restructuring plan and are currently in an advanced stage of finalizing the term sheet with lenders. Moreover, the revised term sheet between the Company and Karachi Hydrocarbon Terminal Limited (formerly known as Hascol Terminals Limited) is substantially agreed in principle to save huge fixed cost to the Company.
During the period under review, the Company recorded net sales revenue of PKR 21,944 million as compared to PKR 40,740 million during the same period last year. Net sales revenue decreased due to the drop in average selling prices across the Country compared to the same period last year coupled with a decrease in sales volume.
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The Company posted a gross profit of PKR 957 million (2020: gross loss of PKR 1,348 million) mainly due to better inventory management and better margins. The EBITDA for the period is PKR 769 million (2020: negative EBITDA of PKR 1,538 million) and the net loss of PKR 897 million (2020: PKR 9,447 million). The LPS for the period stood at PKR 0.90 as compared to LPS of PKR. 9.65 in 2020.
The Company’s gross position has been turned around with PKR 769 million positive EBITDA on the year-on-year comparisons. The continuing net loss is due to high financial charges, something the company is working on eliminating under the planned restructuring.
Once its finances are restructured, the Company has the capacity to generate sizable EBITDA and net profits even on relatively low volumes.
The COVID-19 situation still negatively affected demand for petroleum products due to decreasing travel. This in turn affected oil prices globally. However, a more positive outlook was observed towards the end of the period, and prices were on a rising trend.
