ANALYSIS OF FINANCIAL POSITION

Rupees in Millions
202020192018201720162015
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

Rupees in Millions
202020192018201720162015
Gross sales 1,302,037 1,340,978 1,312,090 1,096,543 906,177 1,114,411
Net sales 1,108,358 1,154,298 1,063,744 878,147 677,940 913,094
Gross profit 12,227 36,017 39,636 37,136 22,525 22,921
Other income (including share
of profit of associates)
10,755 7,559 7,911 11,751 13,411 14,314
Marketing & administrative expenses 14,638 12,414 11,929 11,238 10,511 10,672
Other expenses 51 4,699 3,334 2,378 1,986 3,513
Operating profit 7,749 26,257 31,870 34,662 22,826 22,670
Finance cost 13,427 8,987 5,123 5,923 7,150 11,017
(Loss) / profit before Tax (5,134) 17,477 27,160 29,347 16,289 12,034
(Loss) / profit after tax (6,466) 10,587 15,461 18,226 10,273 6,936
Earning before interest, taxes, depreciation
& amortization (EBITDA)
9,907 27,591 33,357 36,322 24,464 24,050

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
Q1Q2Q3Q4FY 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

Rupees in Millions
202020192018201720162015
Cash & cash equivalents at the beginning of the year (16,468) (7,925) (41,502) (30,274) (39,584) 9,120
Net cash inflow / (outflow) from operating activities 48,260 (9,232) 2,580 (27,965) (994) (29,574)
Net cash (outflow) / inflow from investing activities (4,843) (2,534) 45,226 3,925 4,098 3,489
Net cash (outflow) / inflow from financing activities (27,830) 3,223 (14,229) 12,812 6,206 (22,619)
15,587 (8,543) 33,577 (11,228) 9,310 (48,704)
Cash & Cash Equivalents at the end of the year (881) (16,468) (7,925) (41,502) (30,274) (39,584)

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.