In a very short time- just a decade HASCOL achieved the status of largest OMC after PSO in terms of storage. HASCOL has a strategic license agreement with FUCHS Middle East (FOMEL), an associate of FUCHS Petrolub based in Germany, to represent the brand in Pakistan.
It also markets LPG through its retail network for the automotive sector, and currently there are 15 AutoMax LPG stations across Pakistan in various stages of approval with the government.
HASCOL and Vitol, one of its key shareholders have also entered into a joint venture company for marketing of LNG in the country with 30/70 percent share, respectively.
HASCOL has also signed a Technical Services Agreement with Vitol Aviation to enable the firm to start fuelling aircrafts at Karachi, Lahore and Islamabad airports in the country.
Shareholding pattern
As per the latest annual report for HASCOL, the company's major shareholders include Mr. Mumtaz Hasan Khan, the chairman and director at HASCOL with over 18 percent shareholding; Marshal Gas (Pvt) Limited with over 6 percent shareholding, Fossil Energy (Pvt) Limited with shareholding of around 11 percent.
Also among the foreign companies is the key shareholder, Vitol a global oil trader with a share of around 27.5 percent, which is slated to go up as there is likelihood that this global company might be increasing its shareholding in the company.
Recall that in November 2015, the global oil trader, Vitol acquired 15 percent of HASCOL and another 10 percent in 2016, which made Vitol Dubai Limited the largest shareholder in the company.
HASCOL in the recent past
HASCOL's financial performance over the last five to six years has gone from good to worse. In earlier part of these years, HASCOL's performance as an oil marketing company has been on point as company capitalised on the booming POL demand in the country and hence higher retail fuel sales like petrol and diesel.
At the same time, the company in collaboration with its international sponsor Vitol added 232,000 cubic metres of oil storage capacity at Port Qasim, taking its storage to 28 days from 16 days previously.
| Pattern of Shareholding (as on Dec 31, 2018) | |
| Categories of Shareholders | Percentage |
| Directors and their spouse(s) and minor children | |
| MUMTAZ HASAN KHAN | 18.84 |
| NAZIA MALIK | 0.93 |
| FAROOQ RAHMATULLAH KHAN | 0.23 |
| SALEEM BUTT | 0.22 |
| LIAQUAT ALI | 2.2 |
| NAJMUS SAQIB HAMEED | 0.04 |
| Associated Companies, undertakings and related parties | |
| FOSSIL ENERGY (PRIVATE) LIMITED | 10.66 |
| MARSHAL GAS (PVT) LIMITED | 6.44 |
| Executives | 1.13 |
| Public Sector Companies and Corporations | 0 |
| Banks, development finance institutions, non-banking finance companies, insurance companies, takaful, modarabas and pension funds | 6.16 |
| Mutual Funds | 2.31 |
| General Public | |
| Local | 12.6 |
| Foreign | 0.29 |
| Foreign Companies | 36.22 |
| OTHERS | 1.73 |
| Total | 100 |
| Source: Company accounts | |
| Hascol Petroleum Limited | ||||||
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| Profitability Ratios | ||||||
| Gross profit ratio (%) | 2.73 | 2.40 | 3.70 | 5.16 | 4.25 | 4.4 |
| Net profit ratio (%) | 0.79 | 0.75 | 1.48 | 1.22 | 0.81 | 0.09 |
| EBITDA margin (%) | 1.10 | 1.28 | 1.90 | 2.18 | 1.74 | 1.07 |
| Return on equity (%) | 0.36 | 0.23 | 0.25 | 0.24 | 0.14 | 0.02 |
| Liquidity Ratios | ||||||
| Current ratio (times) | 0.88:1 | 0.91:1 | 0.88:1 | 0.97:1 | 0.96:1 | 0.87 : 1 |
| Quick ratio (times) | 0.47:1 | 0.62:1 | 0.47:1 | 0.50:1 | 0.54:1 | 0.47: 1 |
| Cash to current liabilities (%) | 0.11 | 0.15 | 0.20 | 0.23 | 0.22 | 0.15 |
| Investment / Market Ratios | ||||||
| Earning / (loss) per share (Rs) | 5.97 | 5.89 | 9.39 | 9.41 | 8.56 | 1.14 |
| Breakup value per share (Rs) | 22.01 | 34.21 | 47.94 | 50.59 | 70.89 | 86.21 |
| Source: Company accounts | ||||||
Latest financial performance and beyond
During 2019 so far, HASCOL completed its Lube Oil Blending Plant where Fuchs Middle East will have a 50 percent equity position in the facility, which is likely to help the company in invigorating its lubricants sales with a positive impact on the profitability. However, the profitability in 2019 so far has been depressing.
The company in 9MCY19 posted loss after tax versus profit in similar period last year.
The first two quarters of the year have been brutal in terms of not only volumetric growth but also exchange losses that the company faced. The exchange losses eased in 3QCY19 but the volumetric slide continued and the damage from the exchange losses from 1HCY19 was too large to be offset in overall 9MCY19.
What affected the earnings in 9MCY19 further was over Rs6 billion in other expenses versus none in similar period, which was due to loss incurred due to fluctuation in the international oil prices, market volatility and local economic conditions coupled with massive devaluation of Pakistani Rupee causing an increase in product cost as per the notes to the quarterly accounts.
On the volumetric side, HASCOL's sales revenue also continued to decline as volumes fell from 646,000 in 3QCY18 to 210,000 metric tons in 3QCY19 due to the shortage of working capital to procure the product, which also shot up the finance cost for the OMC.
Also, Hascol Petroleum Limited has faced a significant decline in market share from around 13-14 percent for Jul-Sep 2018 to only 5 percent for Jul-Sep 2019 as all its reliance is on the import of petroleum products and has very minor allocation of local refineries.
Any development on the issue of exchange volatility for the OMCs taken up by the government will bring the much needed respite the downstream oil and has sector is looking for. Also, the company is hopeful to turn things around soon by moving procurement largely to local refineries to reduce reliance on import and hence the volatility in exchange rate movement.
The company is also considering issuing right shares and recently announced that it will issue rights at 10 rupees in a bid to raise Rs8 billion. It is most likely that Vitol will increase its shareholding through this right issue.