In Focus: Attock Refinery Limited (16122008)

ATRL is expected to post huge loss during the first half of current financial year, where we anticipate the company would post loss after tax of Rs1.91bn and LPS of Rs22.4, depicting massive decline of 117 percent on year on year basis. The depressed financial performance of the company would be mainly due to enormous decline in oil prices coupled with substantial deprecation in Pak rupee against USD, resulting in massive exchange loss over same period last year.
Dividend income would by realized in 2nd quarter
During the quarter company had not realized dividend income of Rs505mn which was announced by NRL and APL in their end june-08 results, due to the reason ex-date of both companies arrives in the second quarter. It would be realized in second quarter FY09.
1Q Result Review
ATRL has revealed depressing performance during its first quarter of FY09. Major reasons behind decline in bottom line earnings attributed due to increase in exchange loss coupled with substantial decline in net refinery margins during the period. In 1Q09 company has posted LAT of Rs870mn against PAT of Rs1,241mn in corresponding period last year.
Net refinery margins decline…
Net refinery margins of the company declined to 0.6% from 7.4% during the period under review, owing to massive decline in oil prices coupled with inventory loss over same period last year.
Net exchange loss surged to Rs1.24bn...
During 1Q09, company has registered exchange loss of Rs1.24bn owing to foreign currency transaction, which represent differential of prices calculated at initial exchange rate at the date of the transaction i.e. the rate when refineries enter into a future oil contract with third parity and actual payment made on the date of exchange rate. Company has booked exchange loss till 30 September, 2008 closing exchange rate.
However, as company revenues are realized on Import parity basis which accounts for exchange rate changes, net impact from exchange rate changes should be nil apart from the tax benefit that is realized due to categorization of this cost under financial charges.
Other income increase by 173 percent...
Other operating income of the company increased to Rs301mn from Rs110 in corresponding period last year, which was mainly backed by substantial increase in interest rate during the year due to income on bank deposit increased.