Byco Petroleum Pakistan Limited (PSX: BYCO) had a rough FY19 where its earnings turned negative, hampered largely by the low to nil offtake of furnace oil by the power generation sector as the government announced its fuel oil curtailment plans. Moreover, staggeringly high currency depreciation took a toll on BYCO’s earnings as well. Higher cost of sales and increase in exchange losses resulted in lower gross refining margins and net margins.
However, the 1QFY20 financial performance by the company was seen as a turnaround. BYCO’s earnings more than doubled, increasing from Rs397 million to Rs871 million. Could this actually be a turnaround in BYCO’s fortunes for FY20? While it is too early to predict, it can be seen that the negative effects of currency depreciation have waned in FY20. There stability in PKR which is likely to stay in FY20 has will be beneficial to the company’s bottomline during the year.
| Byco Petroleum Pakistan Limited - Unconsolidated | |||
| Rs(mn) | 1QFY20 | 1QFY19 | YoY |
| Turnover - net | 49,071 | 53,714 | -9% |
| Cost of sales | 46,985 | 52,033 | -10% |
| Gross profit | 2,086 | 1,681 | 24% |
| Administrative expenses | 230 | 232 | -1% |
| Selling and Dist. Expenses | 104 | 130 | -19% |
| Other expenses | 313 | 180 | 74% |
| Other income | 349 | 207 | 69% |
| Operating profit | 1,788 | 1,346 | 33% |
| Finance costs | 917 | 820 | 12% |
| Profit before tax | 871 | 526 | 65% |
| Tax | 0 | 130 | -100% |
| Profit after tax | 871 | 397 | 120% |
| EPS | 0.16 | 0.07 | 129% |
| Gross margin | 4.25% | 3.13% | |
| Operating margin | 3.64% | 2.51% | |
| Net margin | 1.77% | 0.74% | |
| Source: PSX | |||
Growth in net profits for BYCO in 1QFY20 came not only from lower cost of sales and lower exchange related costs, but also lower selling and distribution costs and administrative expenses as well as slower growth in finance cost.
Also reported is the settling of a loan of Rs17 billion by the company during he period, which has helped its liquidity position.
Comments
Comments are closed.