Key Takeaways:
• Changed their crude mix and increase the production of HSD
National Refinery Limited reported loss per share of PKR 197.5 in FY24 against a loss per share of PKR 55.81 in FY23. Furthermore, in 1QFY25 the company reported loss per share of PKR 90.5 against earnings per share of PKR 40.05 in SPLY. The company’s crude oil refining capacity is 70,000 barrels per day.
There was a drop in product prices, especially in the 2nd and 4th quarters, which led to inventory losses. Margins and premiums for HSD and motor gasoline declined sharply over the last three quarters. The company faced inventory losses amounting to 7.4 billion on a month-on-month basis. Globally, there was a decline in lube margins. Although earlier there were good margins, the turnaround also impacted the volumes.
They added that with reduced infrastructure development, they are forced to export bitumen at significant losses. They were also unable to sell volumes due to smuggling, an issue they highlighted to the government and SIFC. Their conversion costs were high due to operating at a low throughput of 52%.
The company-wide gross margins for FY23-24 stood at $2.93 per barrel, compared to $10.17 in the same period last year. Lube margins were $10.44 for FY23-24 as compared to $20.55 in the corresponding period last year.
During the year, they faced high LC charges due to the country’s credit rating and lower foreign exchange reserves. HSD margins dropped to 31% in FY24 compared to 48% in the same period last year.
The company changed its crude mix, increasing HSD production and rationalizing loss-making furnace oil and bitumen.
Important Disclosures
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