Analysis

As of June 30, 2017, variation as compared to FY 2016 is because of the following:
- Shareholders equity rose by Rs 11.3 bn. due to net retained income generated during the year.
- Total non-current assets decreased by Rs. 44.3 bn. mainly due to the reclassification of PIB Investment into Current assets on account of maturity in July 2017.
- Current assets increased by Rs. 94.4 bn. mainly due to the following:

  • Increase in stock in trade by Rs. 15.5 bn. owing to higher stock levels and upward trend in international oil prices.
  • Reclassification of PIB Investment into current assets by Rs. 43.9 bn. on account of maturity in July 2017.

- Increase in trade debts by Rs. 34.4 bn. primarily due to increase in receivables of Power Sector, PIA and SNGPL as compared to last year.
-Total liabilities increased by Rs. 38.9 bn. primarily due to increase in short-term borrowings, trade and other payables and retirement and other service benefits.

Key Financial Ratios with Analysis

201720162015201420132012
Profitability Ratios
Gross Profit ratio % 3.39 2.52 2.06 2.61 2.64 2.86
Net Profit ratio % 1.66 1.13 0.62 1.55 0.98 0.75
EBITDA margin % 3.31 2.70 2.16 3.09 2.16 2.21
Return on Shareholders' Equity % 17.72 11.22 8.43 27.75 20.84 18.74
Return on total assets % 4.64 3.00 2.03 5.86 4.48 2.60
Return on capital employed % 31.79 23.96 25.43 50.73 41.29 47.52
Operating Leverage Ratio % 240.28 (9.03) 218.63 659.57 73.42 (65.90)

Analysis

The variation in ratios as compared to FY 2016 is because of the following:
- The GP and EBITDA ratio of FY 2017 has increased by 36% and 23% as compared to last year due to improvement in gross margins.
- NP ratio has also increased by 47% mainly due to decrease in finance cost and increase in gross profit.
- The return on shareholders' equity, return on total assets & return on capital employed have increased by 58%, 55% & 33% respectively due to increase in net profit as mentioned above.
- The increase in operating leverage ratio is due to more proportionate increase in EBIT as compared to sales on account of increase in margins.

201720162015201420132012
Capital Structure Ratios
Interest Cover ratio (x) 5.95 3.28 2.09 4.45 3.53 2.17
Operating Gearing ratio (x) 55.13 52.04 54.79 47.70 16.57 47.74
Financial Leverage ratio (x) 1.27 1.15 1.24 1.17 0.28 0.95
Weighted Average Cost of Debt % 4.58 5.99 9.58 13.57 8.78 10.62

Analysis

The variation in ratios as compared to FY 2016 is because of the following:
- Interest cover ratio has increased due to increase in EBIT by 50.5% and decrease in finance cost by 17.2%.
- Operating gearing ratio and financial leverage ratio have increased primarily due to increase in Short-term borrowings.
- Weighted average cost of debt has decreased by 23.5% due to decline in effective borrowing rates.

201720162015201420132012
Liquidity Ratios
Cash to Current Liabilities (x) (0.15) (0.12) (0.16) 0.03 0.02 (0.06)
Cash Flow from Operations to Sales (x) (0.026) (0.001) (0.03) (0.04) 0.06 (0.02)
Current Ratio (x) 1.31 1.12 1.10 1.09 1.03 1.15
Quick Ratio (x) 1.07 0.91 0.87 0.79 0.54 0.85

Analysis

The variation in ratios as compared to FY 2016 is because of the following:
- Cash to current liabilities has deteriorated by 25.0% mainly due to increase in current liabilites on account of higher short term borrowings.
- Cash Flow from Operations to Sales has decreased due to detrioration in operational cashflows and increase in sales.
- Current and Quick ratio has increased mainly due to increase in current assets due to reclassfication of PIBs from non-current assests.

201720162015201420132012
Investment/Market Ratios
Earning per share Rs. 67.08 37.81 25.53 80.31 50.84 52.80
Earning per share (Diluted) Rs. 67.08 37.81 25.53 80.31 46.52 33.34
Market value per share (Year End) Rs. 387.35 375.46 385.79 388.85 320.38 235.84
Highest Price Rs. 486.05 399.55 408.05 452.43 334.88 270.77
Lowest Price Rs. 380.91 287.00 325.63 262.10 184.67 205.67
Break-up value Rs. 378.12 337.09 302.96 289.05 245.52 281.01
Price earning ratio (P/E) (x) 5.77 9.93 15.11 4.84 6.30 4.47
Cash dividend per share Rs. 25.00 12.50 10.00 8.00 5.00 5.50
Bonus Share % 20.00 - - 10.00 20.00 20.00
Dividend Payout (including bonus) % 40.25 33.06 39.17 11.21 13.77 14.20
Dividend yield (including bonus) % 6.97 3.33 2.59 2.31 2.18 3.18
Dividend cover ratio (including bonus) (x) 2.48 3.02 2.55 8.91 7.31 7.04

 

Analysis

The variation in ratios as compared to FY 2016 is because of the following:
- Price earnings ratio has decreased due to marginal increase in market value per share as compared to 77% increase in EPS.
- The dividend payout percentage has increased primarily due to increase in cash dividend by Rs. 12.5 per share together with bonus share issue at the rate of 20%.
- The dividend yield percentage is showing an increasing trend due to increase in dividend per share.
- The dividend cover ratio has decreased due to increase in dividend by 116% as compared to increase in profit by 77%.

201720162015201420132012
Activity/Turnover Ratios
Inventory turnover ratio* (x) 16.53 17.83 19.05 16.33 12.20 13.55
No. of days in Inventory No. 22 20 19 22 30 27
Debtor turnover ratio* (x) 5.16 5.08 6.16 8.04 16.90 5.50
No. of days in Receivables No. 71 72 59 45 22 66
Creditor turnover ratio* (x) 11.19 9.17 10.54 8.80 7.82 5.11
No. of days in Creditors No. 33 40 35 41 47 71
Total asset turnover ratio (x) 2.98 2.65 3.12 4.31 4.11 3.93
Fixed asset turnover ratio (x) 160.93 138.98 181.35 246.04 226.77 200.39
Operating Cycle No. 60 52 43 26 5 22

* Note: Inventory, debtor and creditor turnover ratios have been calculated on the basis of closing values rather than the average values.

Analysis

The variation in ratios as compared to FY 2016 is because of the following:
- Inventory turnover ratio has decreased by 7% due to increase in stock in trade by 30% which is partly offset by increase in sales by 21%.
- Debtors turnover ratio has increased by 2% due to more proportionate increase in sales as compared to trade debts.
- Creditors turnover ratio has increased by 22% primarily due to increase in purchases.
- Total assets and fixed assets turnover have increased by 12% and 16% respectively mainly due to increase in sales by 21%.
- The operating cycle has witnessed an increase by 8 days mainly on account of due to timely payments made by the Company to maximise product upliftment from local refineries.