Local refinery sector has been expecting to post huge profit for the year ended June 30, 2022 due to high gross refinery margins (GRMs), which rose to $25 per barrel in the last quarter of the fiscal.
However, these profits would not
be translated into dividends for shareholders of these refineries listed on
the stock market, The News learnt on Friday.
Out of the five refineries in the country, four refineries ie Pakistan Refinery, National Refinery, Attock Refinery and Cnergy Pk are listed on the stock market, whereas Pak-Arab Refinery is a non-listed entity in the country.
“Yes, refinery sector would be
pocketing windfall profits for the fiscal ended by June 30, 2022, however no dividend will be paid to the shareholders,” a top executive of a local refinery told The News.
He said that these profits would be utilised to upgrade refineries under the refining policy in the next four to five years.
The executive shared that it was the government that was pressing on refineries to opt for upgradation instead of paying dividends to their shareholders.
Average GRMs during last quarter of the last fiscal stood at $23 per
barrel – much higher than last 5-year average GRMs of $6 per barrel, which
increased the profitability of the refineries.
However, the government and refineries agreed to upgrade to Euro-V specifications in the next 5 years when a meeting was held between government officials and representatives of the refineries.
During the nine months period ended March 31, 2022, Attock Refinery Limited earned profit after tax of Rs2,840 million from its refining operations compared to a loss of Rs1,129 million posted in the same month in 2021.
Overall profit after tax was Rs3,787 million with earnings per share standing at Rs35.52 for the company, whereas it posted a loss of Rs1,009 million and a loss per share of Rs9.46 for the same period in 2021.
National Refinery Limited during the nine months earned profit after tax of Rs3,673 million resulting in earnings per share of Rs45.93 as compared to profit after tax of Rs892 million that had resulted in earnings per share of Rs11.15 in the corresponding period.
Pakistan Refinery Limited’s profit after tax was Rs5.53 billion for the quarter ended March 31, 2022 against Rs0.54 billion in the same quarter last year.
Cnergy PK earned gross profit of Rs5.0 billion compared to Rs5.4 billion last year.
It should be noted that GRMs recorded the sharpest decline of 83 percent to $4 per barrel compared to July 2022 on account of price hikes and surging inflation.