Hascol Petroleum Limited's (PSX: HASCOL) share price has been storming up with its heightened operational performance in terms of volumetric growth; its sanguine financial performance; its increasing market share; its deal November 2015 deal where the global oil trader, Vitol that acquired 15 percent of HASCOL's equity; and its broadening of its network and storage capacity.

And just recently along with it financial performance for the third quarter of CY16, the OMC announced its BoD's approval of setting up a lube oil blending and grease plant, for which six acres of land has been acquired at Port Qasim for building the plant in collaboration with FUCHS-Germany. The total cost of the project is set to be around Rs1.8 billion, and the plant will be operational in tow years.

The firm's financial performance in the first nine months of CY16 have also been positive. Topline growth has been captivating, with net revenues increasing by 27 percent in 9MCY16, and 42 percent in 3QCY16, year-on-year. The volumetric growth for the firm has been significant; volumes for the latest quarter are expected to have risen by over 50 percent year-on-year. Apart from that, retail fuel margins also lifted the topline.

Earnings for the nine-month period stood up by 20 percent year-on-year, emanating primarily from topline growth, whereas, the bottomline was held back by higher selling and distribution costs and administrative expenses.

Where the firm's financial performance seems to be on track, the addition of a lube blending plant and grease plant will improve volumes and margins for its lubes business. No announcement of dividend also is in line with the capex activity of the company.

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Hascol Petroleum Limited


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Rs(mn)                    9MCY16    9MCY15    YoY   3QCY15   3QCY15    YoY


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Net revenue               70,261    55,345    27%   26,894   18,918    42%


Cost of sales             66,917    53,354    25%   25,720   18,320    40%


Gross profit               3,344     1,990    68%    1,175      598    96%


Selling and Dist.          1,211       710    70%      439      272    61%


Administrative exp           380       256    48%      122       77    58%


Other operating income       151       150     1%       61       43    42%


Operating profit           1,905     1,174    62%      675      292   131%


Finance cost                 319       263    21%      108      101     7%


Profit for the period        904       753    20%      292      237    23%


EPS  - basic and diluted    7.49      6.24    20%     2.42     1.96    23%


Gross margin                4.8%      3.6%            4.4%     3.2%


Operating margin            2.7%      2.1%            2.5%     1.5%


Net margin                  1.3%      1.4%            1.1%     1.3%


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