SHELL Pakistan’s quarterly profits have increased by only 7%

Shell Pakistan Limited (PSX: SHEL) reported a 6.7 percent year-on-year increase in net earnings to Rs2.1 billion (EPS: Rs9.72) in the first quarter of CY22, compared to Rs1.9 billion the previous year.

Improved business performance, such as selling more differentiated fuels and lubricants, the government’s beneficial shift in pricing formula to Platts indexes to match with international pricing, and maintaining safe and efficient fuel operations during the period, were all factors in the improvement.

Furthermore, proceeds from the right issue, which was fully subscribed by shareholders at the start of CY21, were used to reduce current debt, manage working capital, and support operations. It also gave financial assistance in putting the company’s business ideas into action.

According to the company’s financial statement issued to PSX today, net revenue increased by 61.4 percent to Rs82.7 billion, up from Rs51.2 billion in 1QCY21.

As a result, the company’s total earnings increased by 2.3 times year on year to Rs9.3 billion in 1QCY22. Furthermore, the company’s gross margins increased to 11% from 8% the previous year.

On the expense side, the company had a nearly 38 percent YoY increase in distribution and marketing costs, as well as a 16.4 percent YoY increase in administrative expenses during the study period.

Meanwhile, the company’s other expenses increased by 20.4 times YoY to Rs2.5 billion from Rs124 million in 1QCY21, limiting the improvement in the company’s bottom line.

In 1QCY22, the company’s financial costs fell by 21% to Rs216.9 million, compared to the same quarter previous year.