Intermarket Pulse: Pakistan OMCs: Offsetting gains in retail fuels against steep decline in FO sales
- OMC sales during Mar’18 declined marginally by 7% YoY, led once again by steep decline in FO, which dropped 43% YoY. However, other retail fuels like HSD/Mogas and HOBC grew 14%/11% and 18% YoY respectively, offsetting the decline in FO.
- While FO sales declined 67% YoY for PSO, it increased 18% and 38% YoY in case of APL and HASCOL, corroborating that more sales were made to efficient IPPs and non-power sector industries. This was by far the best month for APL FY18TD, as the company was able to capture 12% market share, courtesy of higher than industry growth in all major fuel categories.
- While we are positive on the change in earnings mix for PSO and growth in retail fuels, we downgrade our sector stance to Marketweight. We have a Buy stance on APL with a TP of PRs700/sh, while we are now Neutral on PSO (TP: PRs370/sh), as 11.5% gains in 1M share price mostly reflects the benefits of FO phaseout.
Attock Petroleum Limited is engaged in the procurement, storage and marketing of petroleum and related products. The Company offers a range of lubricants blended with base oils and additives at its Automatic Batch Blending facility. Its products include diesel engine grades, such as GOLD TURBO PLUS, GOLD TURBO, GOLD XTRA and GOLD-50; gasoline engine grades, such as HIDRIVE SUPREME, HIDRIVE SUPER and ATTOCK T-2; industrial grades, such as ATTOCK Hydraulic Oil AW Series, ATTOCK Gear Oil EX Series and ATTOCK TURBINE Oil, and gear oils, which include various specifications, such as EP 140, EP 90, 85W/90 and 85W/140. It has a multi-fuel retail network of approximately 540 retail outlets. The Company's retail outlets also offer compressed natural gas, as well as non-fuel retailing options, such as tuck shops, car services and lubricants. It supplies various types of fuels to various businesses, including manufacturing industry, armed forces, agricultural customers and power producers.
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.
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
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