Attock Petroleum Ltd Reports Record Earnings Amid Industry Challenges.

Karachi: Attock Petroleum Ltd (APL) held its analyst briefing today, revealing its financial performance for FY24 and discussing future strategies. The company reported a record Net Profit After Tax (NPAT) of PKR 13.8 billion, translating to an Earnings Per Share (EPS) of PKR 111, marking an 11% increase year-on-year. Despite a decline in petroleum product sales by 8% to 1.7 million tons, a 20% year-on-year increase in average selling prices helped offset the impact of lower volumes.

According to AKD Securities Limited, the management highlighted that the overall Oil Marketing Company (OMC) industry has contracted, with total sales decreasing by 9% year-on-year in FY24. This downturn is attributed to factors such as weakened economic activity, inflation, and increased fuel smuggling. The presence of 33 formal players in the sector has intensified competition, especially as smaller competitors offer rebates and discounts matching their margins.

APL’s total storage capacity has expanded to 211,000 metric tons following the commissioning of a 19,000 metric ton bulk oil terminal in Dera Ismail Khan. However, the construction of an additional 23,000 metric ton terminal in Tarru Jabba has been halted due to legal issues, which the management expects to resolve soon. The company’s finance income soared to PKR 8.0 billion, up 186% year-on-year, driven by higher cash and short-term investments, along with improved investment yields.

The company also reported strong growth in its retail outlets, ending FY24 with 798 outlets after commissioning 44 new ones, and closed 1QFY24 with a total of 809 outlets. APL has contested the PKR 1.35 per liter margin in OMC margins proposed by OGRA, citing inadequate compensation for the significant inflation burden over the past year. Additionally, the company is actively seeking acquisition targets in collaboration with its group companies amidst recent M&A activities in the OMC sector.

Authorities have designated ministries to collaborate on the upcoming Electric Vehicle (EV) policy, with APL’s management participating in these discussions. The cost of a single EV charger is approximately PKR 40 million, prompting management to emphasize the need for more incentives to encourage investment in this segment.

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