Shell Pakistan swings to profits in Q1

MG News | April 22, 2021 at 01:27 PM GMT+05:00

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April 22, 2021 (MLN): Shell Pakistan Limited (SHEL) returned to profitability in the first quarter ended March 31, 2021, gaining Rs 1.95 billion in net profits (EPS: Rs 11.17), against losses of Rs 4.33 billion (LPS: Rs 28.03) in the same period a year earlier.

The move to profits was helped by a 22% YoY rise in the net sales due to 26% higher volumes which were distorted by the COVID-19 outbreak in the same period last year, wrote Muhammad Saad Ali, Head of research at Intermarket Securities (IMS). As a result, the gross profits of the company surged by 5.34x YoY to Rs 3.99 billion during the said period.

The company’s earnings were further strengthened by a decrease in other expenses as they came down by 92.6% YoY to Rs 124 million.

Other income of Rs 1.4 billion points to exchange gains, in line with IMS estimate. This emanates from a 5% PKR appreciation against the USD. The research highlighted that without these gains (Rs 4.6 per share after-tax), the headline EPS would be at least half the actual result.

As per the financial statement issued by the company, the other positive highlights include a 36.6% YoY decrease in finance cost.

Meanwhile, the effective tax rate came down by 10% YoY to Rs 212 million during 1QCY21.

Financial Results for the quarter ended March 31, 2021 ('000 Rupees)
	Mar-21	Mar-20	% Change
Sales	60,346,721	49,309,716	22.38%
Other revenue	186,292	104,724	77.89%
Sales tax	(9,290,051)	(7,504,663)	23.79%
Net revenue	51,242,962	41,909,777	22.27%
Cost of products sold	(47,254,277)	(41,163,967)	14.80%
Gross profit	3,988,685	745,810	434.81%
Distribution and marketing expenses	(1,724,745)	(1,747,045)	-1.28%
Administrative expenses	(1,313,529)	(1,315,789)	-0.17%
Other expenses	(124,093)	(1,667,284)	-92.56%
Other income	1,423,753	72,784	1856.13%
Operating profit/(loss)	2,250,071	(3,911,524)	-
Finance costs	(274,263)	(432,451)	-36.58%
Share of profit of associates - net of tax	185,267	248,228	-25.36%
Profit /(loss) before taxation	2,161,075	(4,095,747)	-
Taxation	(212,638)	(236,715)	-10.17%
Profit/ (loss) for the period	1,948,437	(4,332,462)	-
Earnings/(loss) per share - basic and diluted (Rupees)	11.17	(28.03)	-

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