Lahore November 15 2021: Oil and Gas Regulatory Authority (OGRA) has enhanced the limit of retail outlets for Hi Tech Limited (HTL) Fuel Stations from 26 to 52 in the Province of Punjab.
OGRA has based its decision on its satisfactory inspection of HTL’s additional fuel storage capacity which has been developed by HTL at its Oil Storage Depot at Sahiwal.
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“The Company’s goal is to bring the OMC Segment to breakeven as soon as possible and is building out its pump network and increasing volumes to generate sufficient income to offset the depreciation charges associated with our storage infrastructure” says Mr. Hassan Tahir Chief Executive Officer
On 31 May 2019, Oil and Gas Regulatory Authority (OGRA) has granted permission to the Company to operate new oil storage facility at Sahiwal and marketing of petroleum products in the Province of Punjab. The Company has signed agreements with various dealers for setting up petrol pumps under the OMC project and also started construction of another storage site at Nowshera, Khyber Pakhtunkhwa.
During the year ended on 30 June 2020, the Company started its OMC operations and expediently worked on completion of its Nowshera oil storage. During the year ended 30 June 2021, Company has completed its oil storage at Nowshera. On August 2021, subsequent to reporting period, OGRA has acknowledged the satisfactory completion of Nowshera oil storage based on third party inspection report. Currently, the Company has eight operational HTL Express Centers, four in Lahore, three in Karachi and one in Rawalpindi. Further, the Company has twenty-three retail outlets operational for sale of petroleum products as on 30 June 2021.
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Refining margins jump as upstream output falls
“The delay in regulatory approvals associated with our KPK business has delayed this endeavor, though company is hopeful that this approval will be received in the near future. Increasing lubricant sales at all OMC locations remains a key focus for your Company.” Says Mr. Shaukat Hassan company Chairman.
In view of successful fulfillment of initial mandatory requirements of Oil and Gas Regulatory Authority (OGRA) for setting up of an OMC and future prospects of OMC in current international scenario as prospected under financial feasibility report, the shareholders of the Company in their 9th Annual General Meeting held on 29 September 2017 approved diversion and utilization of un-utilized IPO funds from HTL Express Centers and wholly owned subsidiary company to OMC Project of the Company keeping in view overall growth of the Company and ultimate benefit to all shareholders and stakeholders of the Company.
The Project envisages setting up 360 retail outlets across Punjab, Sindh and Khyber Pakhtunkhwa Provinces of Pakistan. The fuel stations will offer full range of services such as general store, tyre shop and a car shop amongst others. To support sales, the Company plans to invest in building storage capacities of 25,735 metric tons (MOGAS and HSD) across the country over a period of 7 years
During the first quarter ended September 30, 2021, HTL generated PKR 3.8 billion of Gross Revenue with gross margins of 22 percent. The lubricants segment generated very healthy gross margins of 34 percent and the fuel segment 4 percent gross margins.
Total net income generated was PKR 104 million compared to 89 million of last year. The operating profit for the period was PKR 152 million, an increase of 42 percent compared to same period last year driven by volume growth, cost controls and value chain cost optimization initiatives. This includes almost 10 percent depreciation of rupee versus dollar in the quarter which hit badly and contributed a foreign exchange loss of approximately PKR 74 million. Included in the numbers is a loss associated with our OMC segment of PKR 5 million which includes depreciation expense of 18 Million.
Despite all the challenges posed by the pandemic and rising input costs emanating from surge in the commodity prices, the Company remains cautiously optimistic about the performance in the 2nd half of the year on the back of strong brand equity, continuous initiatives for operational excellence supported by highly committed workforce.
To support value chain cost optimization initiatives along with the current supply chain constraints, the Company is carrying stocks of approximately PKR 2.8 billion. This not only gives us greater flexibility to serve our customers, but combined with lower interest rates has led to a significant reduction in our operational costs.
