Burshane LPG (Pakistan) Limited reported a sharp YoY decline in net sales, down 33% in FY24 to PKR 2,378 million compared to PKR 3,534 million in FY23.
The contraction continued in 1QFY25, with net sales plunging 61% YoY to PKR 264 million. The declining sales reflect lower volumes sold, driven by reduced local LPG quota and higher prices of imported LPG. . Gross margin improved to 6% in FY24 (from 4% in FY23), signaling a better cost structure.
However, the margin shrank to 6% in 1QFY25, down from 9% in 1QFY24. Financial charges surged 23% YoY in FY24 to PKR 70 million due to higher borrowing costs, while in 1QFY25, they decreased 11% YoY to PKR 16 million. EPS deteriorated to PKR (3.28) in FY24, reflecting a 12% YoY decline.
The downward trajectory continued into 1QFY25, with EPS plunging to PKR (1.39) from PKR 0.33 in 1QFY24. The management noted that total demand of LPG in Pakistan is approximately 2 million tons. Where 0.8 million tons is being produced locally, while 1.2 million tons is being imported.
The company’s market share is 3%. Company’s local quota used to be 2,500 tons per month, which is now reduced to 500-600 tons per month. Management highlighted that LPG from Iran is formally imported and not smuggled. Out of total LPG imports, Iranian LPG share is 60%, while 40% is imported from Gulf countries.
Due to winter season, the price of Iranian LPG has risen. Management expects gross margin to improve to 8% in summer season, as LPG landed cost reduce in summer.
Management noted that JJVL’s plant is currently shutdown due to ongoing litigations in courts. If JJVL’s plant is back online, then the local production of LPG would be increased by 500 tons per day.
However, if JJVL does not start, the local production would not increase as there are no major new discoveries happening. Going forward, with increasing consumer and industrial demand of Gas, the company aims to capture more markets through unlocking new sales avenues and opportunities.
Important Disclosures
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