IGI Securities Limited – Flash Note

Karachi, August 15, 2018 (PPI-OT): Oil and Gas Marketing Companies – EPS reported at PKR 16.78 during 4QFY18 back by volumetric growth and inventory gains; 20% bonus accompanied with the result

Attock Petroleum Limited (PSO) announced financial results for 4QFY18 with earnings clocking in at PKR 1.39bn (EPS PKR 16.78) up by +48%YoY compared to PKR 0.94bn (EPS PKR 11.33) in the same period last year. The company announced cash dividend of PKR 25/share, along with a bonus issue of 20%. This brings FY18 earnings to PKR 5.66bn (EPS: PKR 68.19) up by +7%YoY compared to PKR 5.30bn (EPS: PKR 63.89) in the similar period last year.

We attribute this growth in earnings during 4QFY18 likely on the back of inventory gains, lower exchange loss, higher MS sales and higher improved MS and FO margins.

Net Revenues increased by +32%YoY to PKR 55.99bn, likely on the back of increase in domestic MS, HSD and FO prices due to surge in international oil prices and PKR depreciation. As a result of higher domestic prices and increased sales, total revenues are up by +28%YoY to PKR 177.34bn in FY18.

Gross profit increased by +79%YoY to PKR 2.87bn during 4QFY18 as against PKR 1.61bn in similar period last year likely owing to inventory gains, rise in MS sales and hike in MS and FO margin.

Operating costs leaped up by +32%YoY to PKR 0.66bn during 4QFY18 compared to PKR 0.50bn in the corresponding period last year, taking total operating costs for FY18 to PKR 2.54bn up by +35%YoY.

Effective tax rate stood at 41% during 4QFY18 compared to 40% reported in the corresponding period last year likely due to application of super tax, bringing total effective tax rate for FY18 to 32% compared to 31% last year.