ANALYSIS OF FINANCIAL POSITION
| Rupees in Millions | ||||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | |
| Financial Position | ||||||
| Shareholders' equity | 113,061 | 119,181 | 110,452 | 102,850 | 91,581 | 82,310 |
| Non-current assets | 48,814 | 32,854 | 24,561 | 23,883 | 68,142 | 65,559 |
| Current assets | 292,904 | 384,225 | 378,001 | 368,560 | 274,174 | 275,749 |
| Non-current liabilities | 11,664 | 7,528 | 5,165 | 8,090 | 6,234 | 8,321 |
| Current liabilities | 216,993 | 290,371 | 286,945 | 281,504 | 244,501 | 250,676 |
Analysis
As of June 30, 2020, variation as compared to June 30,2019 is as follows:
- Shareholders' equity decreased by 5.1% primarily due to loss incurred during the year.
- Non-current assets increased by 48.6% mainly due to:
- First time recognition of right of use assets on account of implementation of IFRS 16-Leases.
- - Increase in Long term investment due to gain on revaluation of investment in Pak Arab Pipeline Company Limited (PAPCO) and advance paid for subscription of shares of Pakistan Refinery Limited.
- Increase In Deferred tax asset due to recognition of deferred tax asset on incremental minimum tax paid and unused tax losses.
- Current assets decreased by 23.8% due to following reasons.:
- Decline in stock in trade due to negative volume and price variance. Volume variance was caused by increase in market share at year end where as price variance was on account of decline in international oil prices.
- Decline in trade debts mainly due to recoveries from power sector.
- Decline in other receivables primarily due to recovery of exchange loss receivable on FE loans.
- Increase in non-current liabilities by 54.9% mainly due to first time recognition of lease liabilities on account of implementation of IFRS 16 - Leases.
- Decrease in current liabilities by 25.3% primarily due to decline in following:
- Short-term borrowings primarily on account of reduced working capital needs due to decline in value of stock, recovery of trade debts from power sector and FE exchange loss recovery.
- Trade and other payables mainly due to decline in payables related to procurement of product on account of dip in prices.
ANALYSIS OF FINANCIAL PERFORMANCE
Analysis
Company reported loss after tax during the year primarily on account of following elements:
- Decline in gross profit by 66.1% vs last year mainly due to inventory losses on account of sharp decrease in international oil prices during the year.
- Increase in finance cost by 49.4% vs. last year mainly due to higher average policy rate of State Bank of Pakistan (SBP) in FY20.
The above mentioned decline in gross profit and increase in finance cost is partially offset by lower exchange losses and higher interest income recovered from power sector during the year.
ANALYSIS OF VARIATION IN RESULTS REPORTED IN INTERIM REPORTS
| Rupees in Millions | ||||||
|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | FY 2020 | ||
| Gross sales | 387,078 | 365,455 | 285,557 | 263,947 | 1,302,037 | |
| Gross profit / (loss) | 10,706 | 6,970 | 2,465 | (7,914) | 12,227 | |
| Other income | 1,584 | 5,395 | 1,303 | 1,928 | 10,210 | |
| Operating cost | (3,579) | (3,791) | (3,388) | (3,931) | (14,689) | |
| Finance cost | (2,640) | (3,900) | (3,968) | (2,919) | (13,427) | |
| Share of profit of associate - net of tax | 145 | 168 | 145 | 86 | 544 | |
| Profit / (loss) before taxation | 6,216 | 4,842 | (3,443) | (12,749) | (5,134) | |
| Taxation | (2,688) | (1,935) | 17 | 3,274 | (1,332) | |
| Profit / (loss) after taxation | 3,528 | 2,907 | (3,426) | 9,475 | 6,466 | |
Gross Sales
Gross sales declined in 3rd & 4th quarter primarily due to decline in international oil prices during the period.
Gross Profit
Gross profit went down in 2nd and 3rd quarter and turned into loss in 4th quarter primarily on account of inventory loss due to decline in international oil prices.
Other income
Other income was highest in 2nd quarter primarily due to significant receipt of late payment interest from power sector in that period.
Finance Cost
Finance cost continued to rise till the 3rd quarter mainly due to increase in interest rates however, it went down in 4th quarter due to dip in SBP's policy rate.
Summary of Cash Flow Statement
Analysis
The variation in cash flows as compared to FY19 is due to the following:
Operating Activities
In FY20, cash flow from operating activities is positive as compared to negative cash flow last year. The cash flows have improved in FY20 primarily due to recoveries from power sector, recoveries of exchange loss on FE borrowings from Government and decline in stock in trade.
Investing Activities
In FY20, cash outflow from investing activities has increased primarily due to additions in property, plant and equipment and increase in investment in Pakistan Refinery Limited.
Financing Activities
In FY20, cash flow from financing activities is negative as compared to positive cash flow last year. The cash flow is negative primarily due to loans repaid during the year on account of recoveries from power sector, recoveries of exchange loss on FE borrowings from Government and decline in stock in trade.
