APL: Massive inventory gains expand bottomline

August 16, 2022 (MLN): Attock Petroleum Limited (APL) has shown significant progress during FY22 as it posted a profit after tax (PAT) of Rs18.54 billion (EPS: Rs186.23), showing around a four-fold jump when compared to the net profit of Rs4.92bn (EPS: Rs49.43) in FY21, backed by huge inventory gains.

In conjunction with financial results, the Board of Directors has recommended a final cash dividend of Rs30 per share i.e., 300% for the year ended June 30, 2022. In addition, the board also recommended to issue bonus shares in the proportion of 1 share for every 4 shares held i.e., 25%.

Going by the financial statement, the company’s top line registered a robust growth of around 96% to Rs370bn when compared to the last fiscal year given a jump in volumes by 22% YoY (sales of MS, HSD and FO ascended by 19%, 36% and 15% YoY, respectively) and a massive surge in prices of petroleum products, a research note by Arif Habib Limited (AHL) said.

Accordingly, the gross margins surged to 11% from 5% in FY21, on account of higher inventory gains realized during the period under review.

On the costs front, APL’s operating expenses swelled by 2.4 times YoY to Rs32.76bn in FY22.

Meanwhile, the company recorded a net finance income of Rs20.7mn against a net income cost of Rs85mn. Notably, the share of profit from associated companies soared by 2x YoY during the said period.

On the tax front, the effective tax rate stood at 39% in FY22 as opposed to 29% in SPLY.

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