APL has reported earnings per share of PKR 83.53 in FY25 (FY24: PKR 111.09). Furthermore, in 1QFY26 the company reported EPS of PKR 30.63 (1QFY25: PKR 19.17). Net finance income is down 35% in FY25. This decrease is primarily due to a reduction in bank profit rates.
The average rate of return decreased from 21.74% last year to 15.13% this year. APL’s overall market share has experienced a 9% dip due to low furnace oil sales. APL’ market share stood at third-highest at 9.3%, followed by PSO and GO standing at 43.4% and 10.2% respectively. APL’s market share is actually up by 3%. APL and PSO are major players in FO and therefore absorb a greater negative impact from its decline compared to other OMCs. High-Speed Diesel and Motor Gasoline constitute 70% to 80% of APL’s total portfolio.
The fixed OMC margin (stated as PKR 7.87 per liter) for these products has not been increased since November 2023, a period covering almost two years.
The cost of doing business is rising, but the margin remains stagnant. The current margin is calculated to be less than 3% of the total price (based on a total price of 275), which is below the historical minimum margin of 3.5%. Margins on deregulated products are not fixed and fluctuate (sometimes positive, sometimes negative) due to high market competitiveness and prices changing every fortnight.
In Jet Fuel, APL’s margin is the same as the margin earned by the PSO Joint Venture in the aviation business, which PSO previously quoted as $6 to $10 per barrel. APL currently operates 45 Company-Owned Company Operated (COCO) outlets located in major cities and on motorways (M3, M4, M1, M14, E35/Hazara, M5, M9). Motorway sites are all company-operated and were secured via competitive bids. Non-fuel retail segment generates almost PKR 500 million in revenue. This includes rental income from non-detail sources at COCO sites, such as tuck shops and tire shops.
APL is expanding its EV charging infrastructure in alignment with government policy. Three EV stations are currently operational. The government policy focuses on motorways, requiring charging stations every 80 km. APL is leveraging its strong presence on motorways for expansion.
Going forward, APL has signed agreements with Hubco and Huawei for EV stations. The company targets having more than 30 EV stations operational by the end of this year. APL has established a 200 metric ton LPG storage capacity filling plant in Morgah is 100% complete, and initial consignment decantation has occurred.
Operations are scheduled to begin in the first week of December. Initial sales are targeted at 600 to 800 MT per month, focusing first on the North. APL plans to increase capacity up to 3,000 to 4,000 tons within six months. Future plans include expanding setups to Mid-Country and Karachi. A significant challenge is the introduction of RLNG, which is 35% cheaper than LPG and is expected to cause a slight market decline. APL holds a significant cash balance. The funds are held primarily for two reasons, as M&A growth is preferred over organic growth. Significant capital is needed for acquiring high value company-owned sites, such as the recent CDA auction retail outlet on the Kashmir Highway, which cost approximately PKR 3.3 billion.
Important Disclosures
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