FOR THE HALF YEAR ENDED DECEMBER 31, 2007
The first half of the financial year 2008 was marked by improved performance and your Company has earned a pre-tax profit of Rs. 1,749 million during the first half ended December 31, 2007 compared with a loss of Rs. 1,141 million in the same period last year.
During the half year, your refinery operated at a capacity of 6,292 MT/Day as compared to 5,472 MT/Day in the corresponding period last year in which planned turnaround of 28 days had taken place. Sales volumes were 36% higher than the same period last year on the back of continuous operations during the period.
Towards the end of the period under review, price of benchmark crude oil breached the psychological barrier of US $100/bbl and continued to hover near record highs. Arab light crude, which dominates the refinery’s crude recipe, reached an all time high of US $ 90.75/bbl during the month of December 2007. This increase in global oil prices was mainly on account of falling stock of crude and products in USA, cold weather, tight fundamentals and geopolitical tension.
During the period under review, the economy of the country continued to perform well and be partially shielded from rising international energy prices as the government did not pass on the price hike to consumers on a number of major POL products. The country witnessed a growth of 8.9% in POL sales during the period under review. Despite increasing demand of petroleum products internationally, the refining sector globally, particularly Asian refineries will face the challenges of volatile refining margins in the near time.
Work on the USD 320 million Upgradation Project is progressing. The project will lend a hand in meeting the refinery’s future product specification requirements as well as ensuring improved profitability.
Safety continues to be a top priority for your refinery and we have successfully completed 1.30 million man-hours without any recordable injury incident.
The Board of Directors’ would like to thank the management, employees and all other contributing stakeholders for the smooth operations of the Company.
On behalf of the Board of Directors.
