Pakistan Refinery Limited (PSX: PRL) announced a whopping increase in its earnings for 1HFY24 where its profit after tax was seen rising by 8.5 times to Rs6.5 billion – the highest ever half-yearly profits, while its quarterly earnings went from a loss to a profit after tax of Rs2 billion. The growth in PRL’s earnings returned after a weak FY23 where the company posted a significant decline in earnings for the year due to the economic downturn that also affected the downstream oil and gas sector.

The refinery’s topline growth during 1HFY24 stood close to 40 percent year-on-year, while 2QFY24 revenues climbed by 55 percent. The growth in the company’s revenues was primarily due to record half-yearly production of High-Speed Diesel and Motor Gasoline – and because of higher prices of petroleum products.

Due to the economic challenges of FY23 including dollar shortage and the ensuing delays in payments, Pakistan Refinery Limited’s expansion project encountered difficulties as well. PRL has been working on a Refinery Expansion and Upgrade Project (REUP)to manufacture gasoline and diesel complying with Euro-V standards, quadruple the capacity of processing crude, and upgrade the refinery from hydro skimming to deep conversion. The company has inked an agreement with the United Energy Group of China for a refinery expansion and upgrade project where China will invest $1.5 billion in the company’s capacity. Under the Refining Policy announced by the government in August 2023, PRL has entered into two agreements with OGRA covering Refinery Upgrade and opening of Escrow Account. The upgrade to capacity will make PRL one of the largest refineries in the country in terms of refining capacities. As per the company’s reports, work on the Front-End Engineering Design (FEED) of the project is progressing as per schedule and is planned to be completed by September 2024.