Shell Petroleum Company Ltd (SPC), which owns 77.4% of Shell Pakistan Ltd (SHEL), intends to divest its investment and exit Pakistan. Although no reason has explicitly been given for this move, it may be influenced by a combination of global strategy and Pakistan’s frequent balance of payment crises. To recall, SHEL has posted cumulative net losses of PKR3.0bn in the last five years, while also having to issue c.PKR9.0bn rights in 2021. SHEL’s share price has hit two consecutive upper circuit...
AKD Daily Pakistan OMCs: Retail fuels continue to remain strong Increase in volumes directly lifted throughput levels, with 3QCY21 retail volumes at 4.5mn tons, up 20%YoY largely due to a 27%YoY increase in HSD while sequential decline in retail fuels’ volume stood at 1%. Company-wise, HASCOL/SHEL/APL/PSO delivered throughput levels of 122k/703k/590k/740k ltrs/outlet for the quarter, moving -75%/+26%/+27%/+24%YoY and -63%/+2%/+11%/+4%QoQ taking total average industry throughput +14%YoY/+1.3...
Shell Pakistan Ltd (SHEL) has posted a dismal result for 3QCY21, with a NPAT of PKR0.30bn (EPS PKR1.39) down 90% qoq but better than a net loss SPLY. This takes 9MCY21 net profits to PKR2.5bn (EPS: PKR11.44). The 3Q result is worse than our EPS estimate of PKR3.13/sh due to greater-than-expected exchange losses. KEY HIGHLIGHTS FOR 3QCY21: * Net Sales of PKR62.0bn are up 11% qoq (up 42% yoy), where volumes of major products were flattish qoq - Mogas volumes rose 6% qoq but HSD volumes fell 7%...
Shell Pakistan Ltd (SHEL) has posted a 2QCY21 NPAT of PKR0.20bn (EPS PKR0.95), down 90% qoq and up from a loss of PKR3.5bn (EPS: PKR16.54/sh). This takes 1HFY21 net profits to PKR2.15bn (EPS: PKR10.05) vs a loss of PKR36.79/sh SPLY. The 2Q result is better than our estimate of an LPS of PKR4.40 due to inventory gains and lower Opex. KEY HIGHLIGHTS FOR 2QCY21: * Net Sales of PKR55.9bn is up 9% qoq (up 90% yoy but distorted by Covid-19 lockdown last year). Overall volumes rose 12% qoq while pr...
We expect our OMC Universe to post a sharp earnings decline in Apr-Jun 2021 results, with cumulative net profits being nearly wiped out from a high base (down 90% qoq), including an expected net loss for SHEL. The results will taint an otherwise strong year for PSO and APL. Volume sales were robust during 4Q, with petrol sales reaching all-time high levels. But, prices mostly declined, likely leading to inventory losses (from large gains in 3Q) and the PKR slip will inflict exchange losses. H...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
AKD Daily Pakistan OMCs: Ending FY21 on a high! · OMC sales closed FY21 on a high with total sales increasing by 19%YoY where furnace oil provided the major boost, increasing by 197/102% YoY/MoM driven by increased power production as temperatures across the country increase. · Overall, FY21 turned out to be a bumper year for OMC sales, with the second highest sales in history of 19.5mn tons, growing by 19%YoY where FO again took the lead as LNG woes resulted in government shifting back power pr...
AKD Daily Pakistan OMCs: Low base continues to amplify growth OMC volumes continued on a growth trajectory with a massive increase of 57%YoY mainly on the back of low base due to stringent COVID-19 related restrictions during SPLY and stand at 1.7mn tons for Apr'21 while sequentially, volumes grew by 13%. Overall, OMC sales continued on a strong footing, up 19%YoY for 10MFY21 (up 15%YoY excluding FO) where seasonal uptick in FO demand for power generation over the period drove growth of 49...
Shell Pakistan Ltd (SHEL) has posted a NPAT of PKR1.95bn (EPS PKR9.10) for 1QCY21, up a handsome 57% qoq and compared with a big loss last year (LPS PKR20.24). The result is slightly below our EPS estimate of PKR10.0/sh due mainly to less than expected inventory gains. KEY HIGHLIGHTS FOR 1QCY21: * Net Sales of PKR51.2bn is up 3% qoq (up 22% yoy), where volumes of major products fell 6% qoq on average (HSD sales fell 15% qoq) but average retail prices rose 8-10% qoq. SHEL improved its market ...
Shell Pakistan Ltd (SHEL) has posted a 4QCY20 NPAT of PKR1.24bn (EPS PKR5.79), which is higher than our estimate of PKR0.67bn (PKR3.15/sh). This takes CY20 loss to PKR4.82bn (LPS PKR22.53), worse than the loss of PKR1.5bn last year. The major deviations from our 4Q estimate are higher exchange gains and tax credits. KEY HIGHLIGHTS FOR 4QCY20: * Net Sales of PKR49.9bn are up 15% qoq (down 6% yoy), where HSD sales rose 41% qoq (27% yoy) amid strong pickup in industrial and commercial activity,...
For our OMC universe, we expect combined profits of PKR7.7bn in 2QFY21, down c.9% qoq but nearly double yoy. Broadly, on a sequential basis, volumes of one major product (HSD) grew emphatically; but results will be less exciting because of potential lack of inventory gains, in our view. Industry HSD volumes rose more than 20% qoq, where PSO was the winner with c.50% market share. Notably, OMCs are not expected to book significant inventory gains, courtesy biweekly price changes and price cut...
Shell Pakistan Ltd (SHEL) posted an NLAT of PKR6.0bn (LPS: PKR56.69) in 9MCY20, compared to a loss of PKR0.88bn (LPS: PKR8.20) in the same period last year. Profitability was significantly eroded by large inventory and exchange losses as the Covid-19 pandemic led to a collapse in both international oil prices and volumes locally, along with PKR depreciation. 9MCY20 FINANCIAL HIGHLIGHTS During 9MCY20, SHEL booked inventory losses of PKR5.44bn, exchange losses of PKR1.07bn and bore PKR0.66bn du...
Shell Pakistan (SHEL) has posted a NPAT of PKR1.8bn (EPS PKR16.93) for 1QFY21, which is the first profit after three quarters of hefty losses. The result has exceeded our EPS estimate of PKR2.50/sh by a wide margin due to much higher inventory gains than expected. This trims SHEL’s losses (albeit moderately) in the 9MCY20 to PKR6.0bn (LPS PKR56.69). Key highlights: * Net Sales are up 47% qoq to PKR43.6bn, due not only to pick-up in overall petroleum consumption in Pakistan – 8-10% qoq incre...
As per provisional data, overall OMC sales in September 2020 grew 2% yoy but fell 2% mom to 1.53mn tons. Excluding Furnace oil (FO), however, petroleum sales exhibited a poor performance, down 9% yoy and 7% mom. From our channel checks, we understand that the sequential softness in demand is attributed to rise in availability of smuggled fuel from Iran, as border controls are being relaxed. Also, the government is investigating smaller OMCs for involvement in petrol shortage earlier in the ye...
AKD Daily Pakistan OMCs: Volumes come back from the brink Aug’20 kicked off the highest YoY growth for a month since the start of CY17 (21%YoY) where FO took the lead (up 71%YoY), on the back of increased FO-based power generation (captive and grid), while MS/HSD witnessed growth of 10/25%YoY, approaching normalized levels. Overall, local OMC sales have started FY21 on a strong footing, up 14%YoY for 2MFY21 where HSD leads the pack with a growth of 24%YoY while MS/FO follow with a growth o...
Shell Pakistan Ltd (SHEL) has posted a 2QCY20 NLAT of PKR3.5bn (LPS PKR33.13), a repeat of 1Q when it booked a loss of PKR4.3bn (LPS PKR40.49). This takes 1HCY20 loss to a dismal PKR7.9bn (LPS PKR73.62) vs. a loss of PKR1.5bn SPLY. The result is overall poor, where several line items have underperformed our expectations. Notably, SHEL has booked much worse inventory losses than expected and seemingly realised lower lubricants sales, which hence proved to be a weak cushion against the inventor...
Our OMC Universe will continue to post large losses in 4QFY20. The quarter was mired by significant price reductions and another slip in the exchange rate. Sales could have been much lower qoq due to lockdown in April-May, but a big jump in June made up for the earlier weakness. Petroleum prices were reduced more than 25% early in the quarter, but the entire cut was reversed at the end of June (likely containing the extent of the losses). Lower finance costs and potential tax credits will als...
A director at Shell Pakistan bought 20,000 shares at 193.010PKR and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...
New policy on the horizon; good news for the incumbent OMCs but neutral for Refineries The Ministry of Energy has reportedly drafted a new Petroleum policy for the downstream oil sectors – OMCs and Refineries – which has to be reviewed and approved by the ECC. Overall, the policy aims to achieve the following objectives and has many positive measures, which can sustainably lift the profitability of these sectors, in our view. To increase FDI in the sector – specifically in oil refining and...
May sales: Easing of lockdown and lower prices unfold strong pickup in sales As per provisional data, overall OMC sales grew 39% mom in May 2020 (down 12% yoy); excluding furnace oil (FO), however, sales were down only 3% yoy. The progressive withdrawal of lockdown conditions by the government since 9 May (ahead of Eid) has led to strong rebound in both retail fuels and furnace oil (sharply lower prices made FO based power generation more cost efficient). Mogas (petrol) sales rose 46% mom and...
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