October 8, 2020 (MLN): The Board of Directors of Hascol Petroleum Limited (HPL) reviewed the performance of the Company for the period ended March 31, 2020 in its meeting held on October 8, 2020, as per which, the company reported losses of Rs. 6.49 billion i.e. 15% higher as compared to the same period of last year.
According to the Directors’ Review Report, the company has been facing internal and external challenges due to COVID-19 pandemic which affected the working environment of the business. As a result, the first quarterly accounts for the period ended March 31, 2020 are being announced late.
In Q1 2020, there was a dramatic collapse in demand and an unprecedented fall in the international oil prices which translated into inventory losses for the company. On the macroeconomic front, the company’s performance was adversely affected by the devaluation of Pak Rupee. The COVID-19 associated lockdown which was imposed towards the end of March also had a dampening effect on local economic activity, resulting in drop in consumption of petroleum products.
Due to these reasons, the company incurred the abovementioned losses. The loss per share stands at Rs. 6.59, as compared to Rs. 28.37 recorded in the same period of last year.
The successful closure of equity of Rs. 8 billion in January 2020, partial conversion of short-term debt to seven-year long-term debt of Rs. 11.89 billion (out of a total committed long term debt Rs. 13.40 billion) and the continued support of Company’s principal supplier for its working capital eased the liquidity and working capital constraints of the Company. The Company is also considering further restructuring of its short-term loans.
Despite the challenging socio-economic business scenario, the company has begun to reposition itself through organizational restructuring and cost optimization and efforts are being made to return to a sustainable and profitable business. Considering improved demand after easing of lockdown restrictions, the management is optimistic that the performance of the Company will be improved, given the company’s extensive infrastructure including depots and retail outlets. The shareholders of the company have recognized the Board of Directors and the company is in the process of bringing in new talent to spearhead the growth efforts of the company.
Consolidated Financial Results for the quarter ended March 31, 2020 (Rupees'000)
Cost of sales
Gross (loss) / profit
Distribution and marketing
Loss before taxation
Loss after taxation
Loss per share
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