Shell Pakistan Limited has announced its financial results for the CY19, as per which the company has posted its net losses of Rs 1.48 billion (LPS: Rs13.88), i.e. around 35% higher than net losses of Rs 1.1 billion (Rs 10.30) of the corresponding period of last year.
As per the financial statement of the company, the net revenue went up by 7.26% YoY, but more than an increase in the cost of sales (up by 8.11 %) caused gross profits to decrease by 2.12% YoY to Rs. 15 billion.
On the cost front, the distribution and marketing expenses increased by 14% YoY whereas distribution expenses plunged by 45% YoY.
More notably, the main culprit is the colossal increase in finance cost which increased by 4 times YoY, from Rs 370 million to Rs 1.5 billion, damaging the company’s performance owing to higher borrowings with higher interest rates.
The company said in a statement, “Being a part of an import-dependent industry where a large percentage of SPLs costs are denominated in foreign currency, this devaluation had an impact on its cost base and, in turn, on financial performance.”
It further added that the oil industry felt the impact of some of the continued macro-economic challenges faced by the country, owing to the unprecedented devaluation of the rupee, declining fuels market, volatility in the international oil prices and increased minimum tax rates applicable, which has had a significant impact on SPLs financial results said released statement by the company.
