KARACHI: Pakistan Refinery Limited’s (PRL) losses soared 13 times to Rs2.46 billion in the quarter ended December 2018 mainly due to a higher cost of sales compared to sales revenue and massive rupee depreciation against the dollar.
“The losses were caused by a decline in gross refinery margins including an unprecedented decline in the price of motor gasoline (petrol), which went well below the cost of crude, significant inventory losses on furnace oil due to low domestic demand and a huge exchange loss due to sharp decline in the value of the rupee against the dollar,” PRL Chief Financial Officer Imran Ahmed Mirza said in a note to the Pakistan Stock Exchange (PSX) on Thursday.
As of December 31, 2018, the company accumulated losses of Rs7.83 billion and its current liabilities exceeded its current assets by a massive Rs7.75 billion, he added.
The company had booked a loss of Rs203.34 million in the same quarter of previous year. Loss per share of the refinery surged to Rs8.42 in the Oct-Dec 2018 quarter compared to Rs0.66 in the corresponding quarter of previous year.
PRL recorded sales revenue of Rs29.11 billion. However, the cost of sales remained higher at Rs31.04 billion in the quarter. In the same quarter last year, the sales revenue and the cost of sales stood at Rs21.09 billion and Rs20.96 billion respectively. Finance cost swelled almost three-fold to Rs378.66 million compared to Rs132.82 million.
Cumulatively, in first half (July-December) of the current fiscal year, the petroleum refinery booked a loss of Rs3.01 billion (loss per share of Rs9.78) compared to a profit of Rs145.26 million (earnings per share of Rs0.478) in the same period of last year.
“The company believes that the extraordinarily low petrol prices and decline in furnace oil demand will reverse in remaining period of the current year, consequently refining margins will improve,” the official said.
