Shell Pakistan suffers Rs. 877.5m loss due to oil price volatility

KARACHI: Shell Pakistan revealed a loss of around Rs. 877.51 million for nine months of the following year. The loss occurred due to rupee volatility as it increased the cost required for doing business.

Pakistan Shell  released a statement on Tuesday saying,”Overall financials for the nine months…still present a challenging situation for the company, driven primarily by the unprecedented devaluation of the rupee, the volatility in international oil prices and increase in minimum tax rates applicable to the company.”

According to a notification which was sent to Pakistan Stock Exchange (PSX), the net profit of Rs. 1.94 billion was recorded in the same time of 2018.

The oil marketing company also shared the loss of each share of Rs. 8.2 from January to September of 2019 regarding the comparison of earnings on per share of Rs. 18.11 in the same months of previous year.

Report also revealed that Net sales increased to 8% to Rs. 146.64 billion in the nine months of the following year which was Rs. 136.07 billion in 2018.

On the other hand, other expenses have also increased by 26% to Rs. 2.78 billion whereas it was at Rs. 2.21 billion in 2018. According to report, this upraise in the expenses occurred due to rupee vitality and depreciation.

According to report, the finance cost has also increased six times to Rs. 1.12 billion from Rs. 196.97 million in comparison to previous year. This difference is noted due to increase in benchmark interest rate in the nine months of the following year.

The company report said Shell has paid massive tax which was over Rs. 1 billion and gained profit of around Rs. 126.88 million. Also, in the same time of 2018, the company paid Rs. 692.73 million tax on the profit of Rs 2.63 billion.

Apart from this, marketing, distribution and administrative expenses have also increased significantly in the current period. Share of associates profit dropped to Rs. 656.14 million as compared to previous year’s which was Rs.732.07.

Lastly, the income has shown improvement up to Rs. 462.19 million which was estimated to be Rs. 332.93 million in 2018.