Karachi, July 19, 2021 (PPI-OT): Pakistan OMCs: Throughput showing robustness

Increase in volumes directly lifted throughput levels, with 2QCY21 retail volumes at 4.53mn tons, up 19%YoY largely due to a 22%YoY increase in MS while sequential increase in retail fuels’ volume stood at 25%.

Company-wise, HASCOL/SHEL/APL/PSO delivered throughput levels of 327k/693k/ 530k/712k ltrs/outlet, moving -44%/+43%/+2%/+17%YoY and -18%/+13%/+11%/+29%QoQ taking total average industry throughput +14%YoY/+21%QoQ to 698k ltrs/outlet.

Difference between throughput level of HSD and MS standing 102k ltrs/pump for 2QCY21 against 146k ltrs/pump for 1QCY21 indicate government’s efforts to curb influx of grey product bearing fruit while increase economic activity has played a part as well.

PSO (TP: PkR305.6/sh, 34% upside) is our top pick where medium term developments include clearance of circular debt and shift in profile of cash flows due to increased share of retail fuels while focus on improving storage infrastructure will result in company sustaining the recently gained market share, moving forward.