Karachi February 23 2022: The Company posted a pro¬fit after tax of PKR 264 million in the 2nd quarter of the current ¬financial year, as per company filling to the exchange.
Cumulatively, the loss for the half year ended December 31, 2021 was PKR 114 million.
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Though the refining margins in the current period were better than the corresponding period however, Pak Rupee depreciated by 12.4 percent against USD resulting in exchange loss of PKR 1.42 billion as compared to PKR 503 million in the comparative period. As part of Government’s e orts to stabilize Pak Rupee, the Company was again directed to obtain foreign currency loans to settle its crude oil import liabilities.
The Refi¬nery sector is again facing a challenge of reduced demand of High Sulphur Furnace Oil (HSFO) since November 2021, disrupting their operations and creating ullage constraints. This adversity forced the Refi-nery to shut down for 16 days in December 2021. Though the Refi¬nery has resumed its operations, the situation is persisting and to continue uninterrupted operations, the Company may be required to export HSFO which may have a negative impact on the results. The Company is in liaison with the relevant ministries to address this situation.
A positive development during the period, which is expected to contribute towards the Company’s cash flows, was reduction of sales tax on crude oil purchases from 17 percent to 0 percent through Finance (Supplementary) Act, 2022. The Company along with other re¬fineries has been emphasising to the Government that by such imposition re¬fineries were unnecessarily burdened and it is heartening that the Government has withdrawn this levy of sales tax on crude oil.
Consequent to the decision of the Board in December 2021, the Company made an announcement on Pakistan Stock Exchange regarding its plan to undertake Refi¬nery Expansion & Upgrade Project (REUP) with a cost of USD 1.2 billion. The objectives of the REUP are; i) production of EURO V compliant environment friendly HSD and MS; ii) expand crude oil processing capacity to 100,000 barrels per day; and iii) reduction in production of HSFO. The Company is in the process of ¬finalising appointment of ¬financial advisor and technical consultant to undertake Front End Engineering Design (FEED) for REUP.
The Company, along with other re¬fineries, is engaged with the government to conclude the Re¬fining Policy. It is expected that these collaborative e orts in getting the policy approved will bring positive results and the said policy will support the re¬fining sector in upgradation projects to produce high quality environment friendly fuels.
