Karachi: Shell Pakistan Limited (SPL) conducted an analyst briefing today to discuss its financial results for the first half of 2024 and provide insights into the company’s future outlook. Despite a modest 4% increase in revenues, the company reported a substantial 64% year-on-year decline in net profit after tax (NPAT), which amounted to PKR 1.5 billion.

According to AKD Securities Limited, the decline in profitability was largely due to a one-time exchange gain related to a credit note payable to its parent company, Shell plc. Despite these challenges, the management highlighted several positive developments, including relative stability in the domestic exchange rate and receding inflationary pressures, which have provided some relief to the oil marketing sector.

Further details provided during the briefing included Shell Pakistan’s ongoing operations, which encompass over 640 retail sites and a dedicated lubricant blending plant. The company also holds a 26% stake in the white-oil pipeline operated by PAPCO. In terms of ownership, Shell Pakistan remains 77.42% owned by Shell plc and continues to leverage its historical presence in the region.

In addition, management discussed the potential sale of SPL’s entire footprint in Pakistan to Wafi Energy, including all physical assets and shareholding in the white-oil pipeline. Despite these changes, the SHELL brand will continue to operate under brand licensing agreements.

The briefing also touched on recent industry trends, noting that the sharp decline in sales volume observed in 2023 has been largely arrested in 2024. The recent drop in fuel prices is expected to aid in the recovery of volumes. Furthermore, the management is anticipating the implementation of CPI-based indexation on OMC margins for FY24.