NRL: 2nd Quarter Earning Release - Period ending December 2022
Another loss making quarter for National Refinery. NRL announced a loss of Rs. 14 per share in the 2nd quarter, adding loss in the first quarter of Rs. 55 Half yearly loss to Rs. 68.58.
A number of factors, such as fluctuating demand, exchange rate, and crude prices make National Refinery (NRL) earning very volatile. In this half year NRL faced added difficulty - and higher charges - on opening Letters of Credit (LCs) for import of Crude Oil, as Pakistan faced foreign exchange crunch. Very high inflation and high interest rates also made the matters worse.
In the Half Year ending 31 Dec 2022, NRL incurred loss after tax of Rs. 5,484 million (loss per share of Rs. 68.58) as compared to profit after tax of Rs. 2,550 million (EPS of Rs. 31.9)in the corresponding period last year.
In this HY period crude oil prices in international market gradually decreased from approximately US $110/barrel in July-2022 to US $80/barrel in December-2022. As a result product margins started to decline, impacting NRL performance and leading to write-down of finished goods inventory by Rs. 1,055 million and semi-finished inventory by Rs. 367 million.
NRL also faced slow upliftment of Furnace Oil during the second quarter ahead of winter season. Accordingly, NRL operated at lower throughput of 56% as compared to 66% in the corresponding period.
In addition NRL incurred a net exchange loss of Rs. 3,528 million in this HY, as compared to Rs. 2,044 million in the same period last year, because of persistent decline in Pak Rupee.
Fuel Segment of the Company incurred loss after tax of Rs. 6,049 million as compared to a lower loss after tax of Rs. 971 million in the same period last year.
Lube Segment earned profit after tax of Rs. 565 million as compared to profit after tax of Rs. 3,521 million during the corresponding period last year. Local sales volume of Lube Base Oils declined by 17,122 M.Tons (22%).
On Tuesday (28Feb2022) the Market Price of NRL closed at Rs. 145 down 1% . NRL has made a 52week high of Rs. 284 and is down more than 36% in over one year period compared to 8.9% decline in KSE100 Index. See attached price chart.
NRL is trading at P/E of 11 and P/BV of less than half.
NRL has a market cap of Rs. 11.6 billion. Share Outstanding 80 million. Free Float of 32.8%.
NRL is NOT included in our dividend focused Model Portfolio PSX25.
National Refinery Limited got listed on Pakistan Stock Exchange in 1964, and has ticker symbol NRL. Financial Year End is June.
POL holds 25% stake in NRL.
National Refinery Limited was incorporated in Pakistan on August 19, 1963 as a public limited company. The Company is engaged in the manufacturing, production and sale of a large range of petroleum products. The refinery complex of the Company comprises of three refineries, consisting of two lube refineries, and a fuel refinery added to the complex. The company has also commissioned Diesel Hydro De-sulphurisation (DHDS) and Isomerisation (ISOM) units during the financial years 2017 and 2018 respectively.
See More at:
HY Earning Release:https://dps.psx.com.pk/download/document/202904.pdf
www.nrlpak.com
www.nrlpak.com
https://dps.psx.com.pk/company/NRL
NRL Price Chart
