KARACHI: Byco Petroleum Pakistan Ltd. (BPPL) today reported financial results for the year ending June 30, 2020. During the year, despite facing a 15% fall in crude oil prices, Byco was able to limit the reduction in the company’s gross sales by only 5%, from Rs 252 billion to Rs 239 billion in the previous year, through implementation of prudent strategies, says a Press release.
The company’s gross profits, however, increased by 48% to Rs 2.9 billion from Rs 1.96 billion last year due to better pricing of crude cargos. The operating expenses remained within budget. Due to the Pak Rupee’s depreciation, the company booked an exchange loss of Rs 514 million. Finance costs increased due to higher KIBOR rates. Consequently, the company’s net loss came in at Rs 2.43 billion, or Rs 0.46 per share, as compared to Rs 1.68 billion, or Rs 0.32 per share, in FY-2019.
The global energy industry in general and the oil refiners in Pakistan in particular are facing some of the most daunting challenges ever. The rapid spread of COVID-19 brought business activities to a standstill, pushed the global economy into a recession, decimated fuel demand, and reduced oil prices to historic lows. Oil demand in Pakistan fell by 35% following the nationwide lockdown in March and April.
The continued decline in HSFO consumption and prices both at home and abroad, significant exchange losses following the reduction in the value of the Pak Rupee against the US Dollar, weak fuel demand, and inconsistencies in product pricing had a negative impact on the refining margins and the company’s earnings.
Despite facing unprecedented challenges, Byco Petroleum Pakistan continued to focus on delivering a strong operational performance. The company’s Isomerisation Unit is running smoothly, converting Light Naphtha into MS and helping improve refining margins. The SPM facility continues to provide critical support to the refining operations and is now responsible for nearly a quarter of Pakistan’s total crude oil imports. Byco opened 19 new retail outlets during the year. Byco also successfully exported a parcel of HSFO which eased pressure on inventories.
The oil consumption is expected to remain low as COVID-19 ravages lives and economies around the world. In this difficult time, Byco Petroleum Pakistan will do its best to minimize the negative impact of the tough macroeconomic environment, strive to continue achieving operational excellence, and upgrade its facilities to improve product quality and profitability.
FY2020 was a very difficult year for both the local and global petroleum industry, due to the challenges posed by the global pandemic of COVID-19 and the subsequent lockdown and general economic decline that followed.
Byco displayed tremendous resilience to fare much better than many other industry participants in the face of tremendous challenges of a very difficult operating environment.