HASCOL Reports an Astronomical Loss of Rs. 6.44 Billion in Q1 2020

HASCOL Petroleum has finally announced its financial results for Q1 2020.

The oil marketing company has incurred a massive loss of Rs. 6.44 billion. This is the fourth consecutive quarterly loss reported by the company. The losses of the company have increased by 14.20% as HASCOL booked a loss of Rs. 5.64 billion in the same quarter last year.

A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities told ProPakistani,

The company has negative equity & has lost almost 1/3rd of market capitalization in Q1. Although, there was a one-off loss – FX Exchange loss – the debt burden is not sustainable & warrants a massive rights issue. The sponsor profile & willingness to turnaround would keep the company going concern once more money is injected. More pain to come, nonetheless.

The company’s net sales saw a massive decline of 29.70% to Rs. 35.10 billion as compared to Rs. 49.93 billion in the same quarter last year. As sales went down, the cost of sales reduced by 32.35% to Rs. 36.71 billion as compared with Rs. 49.81 billion in the same quarter of last year.

Hascol reported a gross loss of Rs. 1.60 billion as compared with a gross profit of Rs. 122.34 million in the same quarter of the last year.

The operating expenses of the company increased by 11.50% to Rs. 1.35 billion. However, the company’s operating loss reduced by 35.81% to Rs. 2.85 billion as compared to an operating loss of Rs. 4.44 billion last year.

The finance cost increased by 161% to Rs. 1.91 billion from Rs. 732 million during the quarter due to higher average borrowing levels compared to Q1 2019.

The company booked exchange losses worth Rs. 1.45 billion as compared to Rs. 179 million due to unstable Rupee-US Dollar in the first quarter of 2020. The exchange losses increased by 7.10x as compared with the same period last year.

Suban Iqbal, a Financial Analyst, while commenting on the result said,

The difficult time period for Hascol is not ended yet, this is the first quarter result which only contains one week of Lockdown, and sales are down 29% moreover from top to bottom everything is showing the deteriorating picture. Nothing has improved yet HASCOL previously raised Rs. 7.91 billion from 400% right share issue and only first-quarter loss has eradicated 83% value of cash raised from rights issued.

He further said that HASCOL relies on the import of petroleum products and has a very minor allocation of local refineries. So hefty exchange losses and the inventory losses along with a drastic fall of market volumes in the next quarter is expected to follow the same footsteps.

It has reported a loss per share of Rs. 6.59 for Q1 2020 as compared to a loss per share of Rs. 28.37 in Q1 2019.

However, Hascol’s share at the PSX closed at Rs. 17.58, up by Rs. 0.76 or 4.52% with a turnover of 107.77 million shares on Thursday.

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