Rawalpindi: Attock Refinery Limited (ARL) reported a substantial decrease in profits for the first quarter ended September 30, 2024, attributing the decline to reduced refinery margins and product uplifting issues in the local market. According to the company’s financial statement released to the Pakistan Stock Exchange (PSX), the refinery reported a profit after tax of 3.03 billion rupees, down from 11.22 billion rupees in the same period last year.
On October 30, 2024, the Board of Directors of Attock Refinery Limited presented the quarterly financial review, detailing the company’s performance in a challenging economic environment. Despite efforts to improve business processes, ARL's profitability was adversely impacted by the downward trend in refinery margins, reflecting both global market dynamics and local distribution challenges. According to information available from the Pakistan Stock Exchange (PSX), the company’s overall profit after tax, including non-refinery income, stood at 3.33 billion rupees, a sharp decrease from the 11.46 billion rupees recorded in the previous year’s quarter. This translated to an earnings per share of 31.22 rupees, compared to 107.53 rupees last year.
Non-refinery income for the quarter rose to 301.00 million rupees from 241.00 million rupees in 2023, yet this increase was not sufficient to offset the losses incurred from reduced refinery profits. The consolidated financial results for Attock Refinery Limited, including its subsidiary operations, showed an after-tax profit of 3.71 billion rupees, down from 12.30 billion rupees in the previous year. Consolidated earnings per share were recorded at 34.83 rupees, in contrast to 115.38 rupees for the same period last year.
During this quarter, ARL operated at 71% capacity, producing 400 thousand metric tons of petroleum products, a decrease from 457 thousand metric tons produced at 81% capacity in the same period last year. Operational challenges affected the refinery’s output, with the main distillation unit undergoing temporary shutdowns due to low uplifting of diesel. ARL attributed this to increased smuggling and unwarranted imports, which disrupted market demand and resulted in underutilization of its production capacity.
The company indicated a cautious outlook for the upcoming quarters, acknowledging ongoing economic pressures despite improvements in certain macroeconomic indicators such as reduced interest rates and inflation. ARL’s management has stated it will continue to focus on enhancing operational efficiencies to improve revenue generation while reducing costs in light of these challenges.
Last year, the Government of Pakistan introduced the Pakistan Oil Refining Policy for existing refineries, aimed at providing industry incentives. However, recent changes to the Sales Tax Act through the Finance Act 2024 have nullified several incentives under this policy. Refineries, including ARL, have collectively raised concerns regarding these changes, along with the issues of smuggling and unauthorized imports, with relevant government authorities. The company remains hopeful for a favorable resolution that would enable it to sign pending agreements with the Oil and Gas Regulatory Authority (OGRA) under the policy.