SHELL Pakistan posts a mere 7% increase in quarterly profits

MG News | April 21, 2022 at 11:36 AM GMT+05:00

0:00

April 21, 2022 (MLN): Shell Pakistan Limited (PSX: SHEL) reports a 6.7% YoY increase in net profits to Rs2.1 billion (EPS: Rs9.72) during 1Q of CY22 as opposed to profits of Rs1.9bn in the same quarter last year.

The increase was mainly attributed to improved business performance e.g., selling more differentiated fuels and lubricants, the government's positive change in pricing formula to Platts indexes to align with the international pricing and running safe and efficient fuel operations during the period.

Moreover, the proceeds from the right issue which was fully subscribed by the shareholders at the beginning of CY21 have been utilized to reduce current debt levels, manage working capital, and support operations. It also provided financial support to implement the company’s business plans.

Going by the company’s financial statement sent to PSX today, the net revenue of the company surged by 61.4% to clock in at Rs82.7bn, against Rs51.2bn in 1QCY21.

Accordingly, the gross profits of the company reached Rs9.3bn in 1QCY22, up by 2.3x YoY. Moreover, the gross margins of the company rose to 11% compared to 8% last year.

On the expense side, the company observed an almost 38% YoY rise in distribution and marketing costs while the administrative expenses of the company rose by 16.4% YoY during the review period.

Meanwhile, the other expenses of the company substantially by 20.4x YoY to stand at Rs2.5bn from Rs124 million in 1QCY21 which limited the increase in the company's bottom line.

The finance cost of the company dropped by 21% to Rs216.9mn in 1QCY22, compared to the corresponding quarter last year.

On the tax front, the effective tax rate of the company came in at 31% compared to 10% last year.

Financial Results for the quarter ended March 31, 2022 ('000 Rupees)
	Mar-22	Mar-21	% Change
Sales	84,381,126	60,346,721	39.83%
Other revenue	141,430	186,292	-24.08%
Sales tax	(1,814,388)	(9,290,051)	-80.47%
Net revenue	82,708,168	51,242,962	61.40%
Cost of products sold	(73,354,888)	(47,254,277)	55.23%
Gross profit	9,353,280	3,988,685	134.50%
Distribution and marketing expenses	(2,380,662)	(1,724,745)	38.03%
Administrative expenses	(1,529,874)	(1,313,529)	16.47%
Other expenses	(2,528,421)	(124,093)	1937.52%
Other income	141,123	1,423,753	-90.09%
Operating profit/(loss)	3,055,446	2,250,071	35.79%
Finance costs	(216,904)	(274,263)	-20.91%
Share of profit of associates - net of tax	191,947	185,267	3.61%
Profit /(loss) before taxation	3,030,489	2,161,075	40.23%
Taxation	(951,073)	(212,638)	347.27%
Profit/ (loss) for the period	2,079,416	1,948,437	6.72%
Earnings/(loss) per share - basic and diluted (Rupees)	9.72	11.17	-12.98%

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