NRL posts Rs 4 billion loss in FY20 due to int’l oil price changes

August 26, 2020 (MLN): National Refinery Limited (NRL) has posted a net loss of Rs 4.06 billion in FY20, depicting a decline of 53% YoY against Rs 8.69 billion net loss in a previous fiscal year.

This has translated into a loss per share which clocked in at Rs 50.82 against the loss per share of Rs 108.70 in the aforementioned period.

According to the financial results issued to PSX, the company incurred losses during the FY20 as the refinery industry on the whole has been facing significant decline in refinery margins due to asymmetrical changes in international prices of crude and finished products.

Also, in the third quarter, due to the COVID-19 pandemic, Pakistan implemented numerous measures to contain the spread of the virus. The measures adopted resulted in a steep decline in demand for petroleum products and a resultant crash in oil prices. As a result, net revenue declined significantly by 22% for the period as the company had to sell its products at lower prices which were produced from an earlier stock of crude oil purchased at higher rates.

During the period under review, the company bore a gross loss of Rs 11 billion which increased by 2.5 times YoY during FY20.

The other major highlight from the financial result is the finance cost which plunged by 52% YoY to stand at Rs 2.51 billion.

During the lockdown period,  the company closed down its production for a period of 29 days from March 25 as a result of reduced demand. However, since ease of restrictions by the Government,  the demand for petroleum products is now getting back to normal, hence the losses faced by the refinery due to COVID-19 were of short term in nature.

The company said there are no additional impacts on these financial statements due to shut down of refinery in relation to impairment of non-current assets, credit losses on financial assets, and restructuring of financing arrangements.

Copyright Mettis Link News