Karachi: Cnergyico PK Limited has reported a net loss of PKR 1.60 billion for the period ending September 30, 2024, attributed to decreased refining margins, depreciation expenses, and market challenges stemming from falling oil prices and excess stock. According to information available from the Pakistan Stock Exchange (PSX), the company’s gross and net sales reached PKR 73.60 billion and PKR 57.10 billion, respectively, marking a significant increase from PKR 40.30 billion and PKR 33.53 billion in the same period last year. However, despite this increase in sales, reduced refining margins led to a decline in gross profit from PKR 390.00 million last year to PKR 329.00 million this year.
During the period under review, international crude oil prices dropped approximately 12%, falling from around USD 83.00 per barrel in July 2023 to USD 73.00 per barrel by the end of September 2024. This drop in oil prices, combined with reduced demand and increased import volumes, resulted in high stock levels across the industry, causing price losses that affected all oil companies, including Cnergyico PK Limited.
The company’s financial costs were mitigated by a reduction in the Karachi Interbank Offered Rate (KIBOR), which decreased from 23% in the previous year to 18% during the period, leading to a 51% reduction in finance costs. Nonetheless, Cnergyico incurred a loss after tax, primarily due to depreciation expenses amounting to PKR 1.70 billion. The basic and diluted loss per share for the quarter stood at PKR 0.29, a slight improvement from PKR 0.46 per share in the same period last year, when the company recorded a net loss of PKR 2.54 billion.
Cnergyico PK Limited, alongside other refineries, is actively engaged in discussions with the government regarding recent changes introduced via the Finance Act 2024, which reclassified petroleum products from taxable supplies to exempt supplies under sales tax. The company reported that this policy shift has had adverse effects on its ongoing operations and potential investments planned under the Brownfield Oil Refining Policy, aimed at upgrading existing refineries.
The company’s Board expressed gratitude to the Government of Pakistan, its strategic partners, customers, financial institutions, suppliers, vendors, and shareholders for their continued support during the period.