Despite higher than expected earnings growth in 1HFY17, Attock Petroleum Limited (PSX: APL) share prices went down as there was swift selling; the shareholders most probably did not take the Rs15 per share dividend news well.
APLs financial performance is elevated with 1HFY17 profits up by 92 percent, and 2QFY17 earnings up by 68 percent, year-on-year. However, little does it come from increased revenues in revenue; the firms topline in 1HFY17 remained static at Rs61 million in 1HFY17; volumes are expected to be cowed by around 8-9 percent quarter-on-quarter in 2QFY17. However, after withstanding tumbling oil prices for around two year, the OMC sector is poised to benefit from relatively stable input cost. This is why APL witnessed a 65 percent year-on-year increase in gross profit for 1HFY17, with gross refining margins (GRMs) improving by over 200 basis points to 6.37 percent in the same period.
What further boosted the bottomline was the reversal of Worker Welfare Fund expense in the period with inflows under other charges. According to the market, APL wrote back WWF provisions of Rs661 million following a Supreme Court decision. Another factor that helped APLs profits was the share of profits from associates. However, APLs finance cost jumped by 58 percent on account of ambitious capex plans according to AKD securities.
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