National Refinery Limited (NRL) took a notable hit in its financial performance during the fiscal year 2022-23 as it posted a loss-after-tax of Rs4.46 billion against Rs9.08 billion profit-after-tax in FY22, WealthPK reports. As per the company’s annual report, though NRL posted a gross profit of Rs13.1 billion during FY23, it was still significantly lower than gross profit of Rs23.7 billion in FY22. The significant fall in gross profit coupled with the inflationary impact caused a substantial decrease in profit from operations. Moreover, the company posted a loss-before-tax in the year mainly due to a 79% rise in finance costs over the previous year. NRL’s revenue moved up to Rs298.8 billion, representing a notable 18.6% increment from the preceding year. However, the cost of sales also surged by 25% during the period under review.

Furthermore, the company posted a loss per share of Rs55.81 in FY23 as compared to earnings per share of Rs113.53 in FY22. During the year, the refinery contributed Rs59.1 billion to the national exchequer in the form of taxes and duties. The FY23 remained extremely challenging and volatile for the oil refining sector. Factors like stringent environmental regulations, reliance on alternative energy sources, smuggling from neighbouring countries, and political instability have added to the difficulties of refineries. Besides, the country's depleting foreign exchange reserves along with its downgraded credit rating caused serious problems in the establishment and confirmation of letter of credits for import of crude oil.

NRL-analysis of quarterly variations Quarterly analysis reveals that sales revenue was higher in the second quarter as compared to the remaining quarters of FY23. Between the first and third quarters, there was a rising trend in gross profit, which was mainly due to the increasing prices of petroleum products. Among all quarters, NRL only earned profit-after-tax in the fourth quarter. Company profile and future outlook

National Refinery was incorporated in Pakistan on August 19, 1963, as a public limited company. It is engaged in the manufacturing, production and sale of a range of petroleum products. Amidst a continuously changing economic landscape, the refinery is striving to be a leading organisation that continuously produces high-quality, diversified, environment-friendly energy resources and petrochemicals.

Credit: Independent News Pakistan (INP)