Attock Petroleum’s Profit Declines by 55% in Q1 FY25 Amid Lower Sales and Margins

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Attock Petroleum’s Profit Down 55% in Q1 FY25

Attock Petroleum Limited (APL) reported a significant 55% year-on-year (YoY) decline in net profit for the first quarter of the fiscal year 2025 (1QFY25), amounting to Rs. 2,385 million. This contrasts sharply with the Rs. 5,260 million profit recorded in the same period last year (1QFY24), translating to an earnings per share (EPS) of Rs. 19.17, compared to Rs. 42.27 in the previous year. On a quarter-on-quarter (QoQ) basis, profit was also down by 22% from Rs. 3,041 million in 4QFY24, with an EPS of Rs. 24.45.

Lower Sales and Volumes Impact Financial Performance

Net sales for the quarter declined by 17% YoY, reaching Rs. 112,718 million, mainly driven by lower retail petroleum prices and a contraction in sales volumes. The volume drop was most pronounced in Furnace Oil (FO), which fell by 62% YoY, while Motor Spirit (MS) and High-Speed Diesel (HSD) volumes declined by 4% and 12%, respectively.

On a sequential basis, sales also fell by 14% QoQ, as product prices dropped and overall petroleum product volumes fell by 10%. The largest declines in this category were in HSD (down 17%) and FO (down 8%), while MS saw a 6% drop QoQ.

Gross Margins Hit by Inventory Losses

APL’s gross margins fell significantly to 3.6% in 1QFY25, compared to 7.5% in the same quarter last year, primarily due to inventory losses. This contrasts with the hefty inventory gains recorded in the corresponding period last year (SPLY). However, on a QoQ basis, gross margins slightly improved by 47 basis points (bps), as the scale of inventory losses was smaller compared to the previous quarter.

Finance Costs and Taxation Rise

Finance costs also surged by 30% YoY, reaching Rs. 486 million in 1QFY25, driven by higher mark-ups on late payments. Meanwhile, the company’s effective taxation remained relatively stable, recorded at 39% in 1QFY25 versus 40% in 1QFY24.

Outlook for Attock Petroleum

The steep decline in Attock Petroleum’s profitability reflects a challenging market environment characterized by lower petroleum demand, shrinking margins, and inventory-related losses. The company’s ability to navigate these headwinds will likely depend on market conditions, especially changes in petroleum prices and consumption patterns in the coming quarters.

The 55% YoY drop in Attock Petroleum’s Q1 FY25 profit underscores the pressure the company faces due to declining sales and shrinking margins. The future trajectory of APL’s financial performance will be closely tied to the dynamics of petroleum product pricing and demand recovery.