Ayesha Mudassar

Pakistan Refinery Limited (PRL) posted robust revenue and profit growth in the first quarter of the ongoing fiscal year 2023-24, compared to the corresponding period of FY23, according to WealthPK. The net sales revenue increased to Rs93.3 billion in 1QFY24 compared to Rs73.1 billion in 1QFY23, thus posting an impressive 28% growth. Furthermore, the company’s gross profit ballooned to Rs8.9 billion from Rs1.6 billion in 1QFY23. The profit-before-tax skyrocketed to Rs7.4 billion in 1QFY24 from Rs1.2 billion in 1QFY23, registering a whopping 482% growth.

After-tax profit also leapt to Rs4.4 billion in 1QFY24 from Rs1.02 billion in 1QFY23, posting a stunning growth of 336% during the period under review.

Financial performance over last six years

The company had exceptional margins in FY22 as depicted by an operating profit of Rs17.50 billion and profit-after-tax of Rs12.6 billion.

In FY23, however, the refinery experienced a significant fall of 85.5% in its net profitability, which clocked in at Rs1.82 billion as compared to a profit of Rs12.57 billion in the earlier fiscal. The lower profit was mainly due to challenging and adverse economic conditions perpetuated by the depletion of the country's foreign exchange reserves, depreciation of local currency, and highest-ever inflation.

In addition, the company persistently faced the Letter of Credit (LC) opening issues and steep surge in interest rates, which dented its profitability. However, the refinery ensured the continuity of operations by deploying various strategies such as procurement of economically fit crudes, production of high-margin products, dynamic inventory planning, and application of cost-saving measures.

 Profitability ratios over last six years

The company had exceptional margins in 2022 as depicted by a gross profit ratio of 10.6 and a net profit ratio of 6.6.

PRL is a hydro-skimming refinery incorporated in Pakistan as a public limited company in May 1960. PRL is engaged in the production and sale of petroleum products. PRL operates as a subsidiary of Pakistan State Oil Company Limited (PSO), which is the largest oil marketing company in Pakistan. PRL's shares are publicly traded on the Pakistan Stock Exchange Limited.The refinery is strategically located in Karachi, with a designed throughput capacity of 50,000 barrels per day. The major units in the refinery complex are the Crude Distillation Unit, Hydro-treating Unit, Platformer Unit and Isomerisation Unit.

Credit: INP-WealthPk