AKD Securities Limited - Off the Analyst's Desk.

Karachi -- October 26, 2022 (PPI-OT)

APL: 1QFY23 Result Review - Earnings surprise

Attock Petroleum (APL) announced its 1QFY23 result today where the OMC reported unconsolidated NPAT of PkR4.29bn (EPS: PkR34.48) compared to PkR2.38bn (EPS: PkR19.2) SPLY. The deviation was mainly on the back of higher than expected inventory gains which clocked in at ~PkR7.8bn against our expectation of loss of PkR855mn.

Topline clocked in at PkR123.9bn for 1QFY23, changing by -4%/70% on QoQ/YoY basis majorly on the back of rising risen fuel prices, which were up by 50%/62% since May'22, for MS/HSD. On a volumetric basis, offtakes for the company remained down by 26% during the quarter, taking company's market share in the segment to 9.72% for 1QFY23 against 9.65% for 1QFY22.

APL's reputation of a relatively loss-avoiding nature has been established historically through its ability to shield itself from inventory and exchange losses on a far better magnitude than its OMC peers. High refinery upliftment from its associates helps it to limit its forex losses, whilst enjoying lower inventory losses because of benefitting from group structure which keeps a streamlined supply-chain. To note, the OMC sector is fundamentally expected to...