Shell Pakistan 9MCY15

Crude oil prices and exchange rates have taken a toll on the OMCs. And Shell Pakistan Limited’s otherwise strong operational growth has also been impacted by the adverse effects of the aforementioned factors; during the nine-month period ending September 30, 2015, Shell Pakistan saw a shrink in its top line by about 22 percent year-on-year primarily due to low crude oil prices.

While the firm incurred higher operating costs due to the exchange rate impact and inventory losses due to falling crude oil prices, which dented the firm’s net earnings, Shell Pakistan was able to reduce its finance cost sizably. In 1QFY16, the OMC saw a decline of 31 percent year-on-year in its financial charges.

Apart from these exogenous factors, Shell Pakistan continued to build on its volumetric growth and operational efficiencies. The firm has been increasingly working towards increasing industry volumes and market share despite much lighter investment program by Shell Pakistan compared to industry standards.

The firm’s Chairman Review for 9MCY15 highlights some key factors that continue to affect Shell Pakistan Limited. These include the low regulated fuel margins, rising receivables, and the imposition of turnover taxation.