Ayesha Mudassar

National Refinery Limited (NRL) reported a net loss of Rs7.2 billion for the first quarter of the ongoing fiscal year 2024-25, marking a significant decline from the net profit of Rs3.2 billion recorded during the same period of the earlier fiscal, according to WealthPK.

The company incurred losses primarily due to depressed global refining margins, driven by a sharp decline in the prices of crude oil and petroleum products. Furthermore, nationwide demand for refined petroleum products, particularly diesel and furnace oil, experienced a volumetric decrease compared to the same quarter in the previous year.  As per the results available with the Pakistan Stock Exchange, the company’s revenue declined by 9% year-on-year (YoY) to Rs66.9 billion from Rs73.8 billion in the first quarter of FY24.

However, the cost of sales rose by 10% YoY, totalling Rs73.2 billion compared to Rs66.4 billion in 1QFY24. This resulted in a gross loss of Rs6.2 billion in 1QFY25, posting a significant downturn from the year prior. NRL was incorporated in Pakistan on August 19, 1963, as a public limited company. It is engaged in the manufacturing, production and sale of a wide range of petroleum products. As of June 30, 2024, NRL had 79.9 million shares, which were held by 7,540 shareholders.

Associated companies, undertakings and related parties owned a majority stake of 51%, followed by the general public holding 19.6% shares. Islamic development banks accounted for 15%, while insurance companies held 4.3% of the shares. Around 3.4% of the shares were held by non-banking financial institutions. The remaining shares were distributed among various other categories of shareholders.

Sectoral analysis -- 1QFY25

Pakistan’s refinery sector reported a net loss of Rs7.8 billion for 1QFY25, marking a remarkable deterioration from the net profit of Rs16.6 billion recorded in the first quarter of FY24. Key companies within the sector include Cnergyico PK Limited (CNERGY), Pakistan Refinery Limited (PRL), National Refinery Limited (NRL), and Attock Refinery Limited (ATRL). According to the results compiled by WealthPK, the sector’s revenue declined by 7% YoY to Rs286.7 billion from Rs308.5 billion in the first quarter of FY24.

However, the cost of sales rose by 6% YoY, totalling Rs290.9 billion compared to Rs275.1 billion in 1QFY24. The selling and distribution costs grew by 45% YoY, while other expenses decreased by 33% YoY during the period under review. Moreover, the industry’s finance cost increased by 6% YoY to Rs5.01 billion compared to Rs4.7 billion in 1QFY24. On the tax front, the sector paid substantially lower taxes, worth Rs1.03 billion, compared to Rs12.2 billion paid during the corresponding period last year, showing a 108% YoY decline.

Credit: INP-WealthPk