Attock Petroleum Limited's financial performance (PSX: APL) for 1HFY16 presented a mixed bag of expectations and surprises. Where the oil marketing company continued to feel the jitters from low oil prices and lower volumetric sales like in earlier quarter as expected, it was able to surprise the market with its announcement of above expectation dividend for the 2QFY16.

The oil company's revenue decline was a big hit to the firm's earnings in 1HFY16. APL has generally underperformed the industry and the stock exchange in 1HFY16 when it comes to volumetric sales by the firm. This was due to stiff competition in the industry that resulted in the firm witnessing a shrink in its market share of energy products during the period. In particular, the firm was affected by lower furnace oil margin sand volumes. Besides the 10-14 percent decline in overall product volumes and margins, APL continued to witness inventory losses. However, the quantum of inventory losses in 2QFY16 seems to be much less than what was experienced in 1QFY16. Hence, the impact of the same on bottom-line can be seen to be less devastating.

Also, gross margins shot up north with amid lower inventory losses relatively with fixed margins on retail products like petrol and diesel. While the decrease on finance cost was positive for the bottom-line, exchange losses stemming from depreciation of Pak Rupee resulted in decrease in other income.

Overall, the earnings for 1HFY16 inched up by 12 percent year-on-year, while the earnings for 2QFY16 alone jumped by over four times that of 2QFY15. This second quarter increase in profits was also due to low base effect in similar period last year in addition to the factors mentioned above. The OMC announced an interim cash dividend of Rs15 per share.