Shell Pakistan Limited has announced financial results for the first quarter that ended March 31st, 2020.

The company incurred a huge loss after tax of Rs. 4.33 billion as compared to a profit of Rs. 256.89 million in the same period last year. Shell’s sales landed at Rs. 41.90 billion, translating into an 8.07% decrease as compared to Rs. 45.58 billion recorded in the corresponding period of the last year.

The sharp decrease in oil prices resulted in exceptionally high inventory losses during the first quarter of 2020 which in turn significantly impacted financial performance. The devaluation of Pakistani Rupee against the US dollar by a further 7%, and its effects were felt in the overall results of the company.

The cost of sales were reported at Rs. 41.16 billion, up by 3.06% as compared with Rs. 42.46 billion in the same quarter in 2019. This took the gross profit plummeted to Rs. 745.81 million. down by 76.12% as compared to Rs. 3.12 billion recorded last year.

The quarter has been greatly affected by the impact of the unprecedented coronavirus pandemic. The pandemic led to a global economic downturn resulting in crude oil prices sharply declining from $66/barrel in January 2020 to $22/barrel in March 2020 decreasing by more than 60%, primarily owing to the plunge in global oil demand. The oil industry felt the impact of this volatility in the oil prices which also effected Shell Pakistan.

The company has maintained adequate stocks of product in line with compliance requirements.

The oil industry also felt the impact of the declining fuels market in Pakistan owing to the nationwide lockdown measures enforced by the Government including countrywide closure of non-essential businesses, factories and public transport.

Consequently, Oil marketing companies in Pakistan experienced a reduction in oil consumption as Pakistan’s Motor Gasoline volumes fell by 10% while High Speed Diesel volumes fell by 29% compared to same quarter last year. This declining trend in volumes also impacted Shell Pakistan and had a significant effect on its financial performance.

Shell’s other expenses were increased to Rs. 1.66 billion, up by massive 317.5% as compared to Rs. 400 million recorded in the same period last year. Administrative expenses saw an increase of 71.50% to Rs. 1.31 billion as compared to Rs. 764 million in the corresponding period of the last year. Distribution and expenses were increased to Rs. 1.74 billion from Rs. 1.60 billion.

Other income squeezed to Rs. 72 million, down by 75% as compared to Rs. 279 million in the same period last year. With finance cost surging by 31% to Rs. 432 million as compared to Rs. 330 million last year.

Shell Pakistan reported a loss per share of Rs. 40.49 during the first quarter of 2020. It had reported earnings per share of Rs. 2.40 in the same period last year.

The post Shell Pakistan Reports Massive Rs. 4.33 Billion Loss Due to COVID-19 appeared first on .

Originally Published on ProPakistani.com

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