Pakistan OMCs: Retail numbers sing a sad song
- May’19 OCAC reported numbers round-up 11MFY19 where share of transport group has increased to 77% (vs 64% in 11MFY18) as power based FO demand falters, while rising variability between MS & HSD retail product flows undergoes tangible impediments (grey market, switch to alternatives, demand propensity) not seen in previous B2B sales.
- Collating retail outlet numbers with transport sourced retail fuels during 2QCY19, we highlight an average throughput of 570K ltrs/outlet (moving –34/-14% YoY/QoQ), where HASCOL/APL/SHEL/PSO maintained 443K/660K/631K/546K ltrs/outlet (moving –70%/-11%/-4%/-1%YoY).
- Difference between throughput of MS and HSD stands at 96k ltrs/outlet against an average of 68k ltrs/outlet for last four quarters – the most convincing indicator yet of significant influx of grey product into the local market.
- With corporate profitability in the space taking a hit across the board (largely from pump prices rising, while OMC margins remain stagnant and FX risks mount) we make the case for lower mean throughput (already down by 34/14% YoY/QoQ for 2QCY19) making incremental pump additions less feasible. HASCOL/PSO already lead the way to a lower mean with average throughput being 22/4% below the mean throughput.
- With HASCOL's throughput dipping by 70%YoY, the mean reversion of the company seems to be complete as the throughput for 2QCY19 now stands 22% below mea throughput after remaining at average premium of 45% for last fourteen quarters.
AKD Research
Hascol Petroleum Limited is a Pakistan-based company, which is engaged in procurement, storage and marketing of petroleum and related products. The Company is involved in the sale of petroleum products, such as fuel oil, high speed diesel, gasoline, Jet A-1, liquefied petroleum gas (LPG) and lubricants. The Company offers products, such as Tiger Super, Rocket Diesel and Furnace Oil. The Company offers Fuchs Lubricants products, which include corrosion preventives, quenching oils, industrial lubricants, open gear lubricants, greases, automotive oil and metal working fluids. The Company also markets LPG as an automotive fuel through its retail network. The Company is engaged in owning, leasing and renting oil storage facilities, as well as importing petroleum products. The Company has storage facilities at Machike, Shikarpur and Daulatpur. The Company sells its product to dealers, government agencies and autonomous bodies, independent power project and other corporate customers.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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