Shams ul Nisa

Attock Petroleum Limited (APL) net sales increased by 14.4% and net profit by 40.8% at the end of the first half of FY24. The company recorded net sales of Rs271.9 billion and net profit of Rs7.79 billion during the review period, reports WealthPK. The rise in average selling prices led to this increase in sales and a notable growth in interest income contributed to the increase in the net profitability during the period. Additionally, the company’s gross profit grew 11.98% from Rs11.9 billion in 1HFY23 to Rs13.37 billion in 1HFY24. However, the gross profit margin fell slightly to 4.92% in 1HFY24 from 5.02% in 1HFY23.

Owing to a reduction of 25.56% in the operating expenses, the company managed to earn a massive operating profit of Rs10.03 billion in 1HFY24, 32.72% greater than the same period last year. The reduction in the operating expenses was ascribed to currency appreciation, resulting in decreased exchange losses. During 1HFY24, the net profit margin improved to 2.87% from 2.33% in 1HFY23. Furthermore, the earnings per share jumped to Rs62.69 in 1HFY24 from Rs44.51 in 1HFY23.

Quarterly Analysis

A similar pattern was observed at the end of the second quarter of FY24, with a surge of 19.0% in net sales to Rs135.47 billion. Likewise, the operating profit grew massively by 141.34% and net profit by 103.4% during 2QFY24. The company registered an operating profit of Rs2.27 billion and Rs2.54 billion net profit in 2QFY24. The earnings per share increased from Rs10.03 in 2QFY23 to Rs20.42 in 2QFY24.

Profitability Ratios Analysis

The net profit to sales decreased from 3.19% in 2018 to 2.63% in 2023. During the six years, the company recorded a maximum of 5.01% net profit margin in 2022 and the lowest of 0.5% in 2020. A company's capacity to boost the operating income by increasing sales is gauged by its operating leverage. The operating leverage for APL has shown a varied pattern over the years, with positive value in 2018, 2020, and 2022. This reflects that during the years, the company managed to generate higher sales with lower costs.  But in 2019, 2021, and 2023, it stayed negative, indicating lower revenue generation to cover expenses.

The income that investors make on each stock is known as the total shareholder returns. The overall return to shareholders has increased over time, reaching a peak of 31.01% in 2023 from 0.97% in 2018. Nonetheless, the company saw a 34.95% negative total shareholder return in 2019.

Liquidity Ratios Analysis

The current ratio evaluates how well a business can use its current assets to meet its short-term liabilities. Starting from 2018 to 2023, APL's current ratio stayed above 1.2, demonstrating the company's consistent ability to meet its obligations using the current assets. However, from 2018 to 2022, the quick ratio remained below 1, peaking at 1.05 in 2023. Over time, the cash-to-current liabilities stayed below 1; however, it did increase from 0.19 in 2018 to 0.73 in 2023, showcasing the company can pay for 73% of its short-term liabilities with cash.

Future Outlook

The company is committed to building a sustainable future through programs to lessen its carbon footprint and promote energy conservation. This can be reflected in two 180KW Fast Electric Vehicle Charging stations that have been successfully installed and are now operating at key retail locations. These initiatives give the owners of electric vehicles useful options while demonstrating the company’s steadfast dedication to environmental responsibility. Additionally, the company has implemented on-grid solar systems with net metering across various locations.

Company profile

Attock Petroleum Limited was established in Pakistan as a public limited company on December 3, 1995. The principal activity of the company is procurement, storage and marketing of petroleum and related products.

Credit: INP-WealthPk