The company is engaged in the refining of various petroleum products including Liquefied Petroleum Gas, Light Naphtha, Heavy Naphtha, High Octane Blending Component, Motor Gasoline, Kerosene, Jet Fuels, High Speed Diesel and Furnace Oil. In 2007, it launched its fuel marketing activities managed by the Petroleum Marketing Business (PMB), formerly known as Oil Marketing Unit. This segment has grown remarkably over the past few years. The firm enjoys presence in both mid-stream and downstream sector of the oil business now.
In addition, a new company Byco Oil Pakistan Limited was set up in 2008 for setting up 120,000 barrels a day refinery. It was completed in December 2012 and is the largest refinery in the country. However, the refinery stayed shut for a couple of years.
Byco Isomerisation Pakistan (Private) Limited (BIPPL) is a wholly owned subsidiary of Byco Petroleum Pakistan Limited. The isomerisation plant has a capacity of processing 12,500 barrels per day. Located in Balochistan, the plant is used for converting light Naphtha into premium Motor Gasoline. It also converts the hazardous unsaturated compounds to non-hazardous saturated compounds, making Motor Gasoline from Isomerisation Unit more environments friendly.
According to the firm's latest annual reports, Byco Petroleum Pakistan Limited today represents the country's largest refining complex of 155,000 barrels per day with backward and forward integration in the form of Single Point Mooring (SPM) facility and oil marketing license respectively.
Shareholding at Byco Petroleum
Over 90 percent of Byco Petroleum Pakistan Limited is held by Byco Industries Incorporated, located in Mauritius, whereas banks and financial institutions hold around 4.66 percent with general public accounting for 3.22 percent holding in the company.
Byco Industries Incorporated (BII), Mauritius is the ultimate Parent company. All Byco companies that existed previously have been merged into one entity - Byco Petroleum Pakistan Limited. The High Court of Sindh in January, 2017 approved the merger of Byco Oil Pakistan Limited and Byco Terminals Pakistan Limited with and into Byco Petroleum Pakistan Limited.
Historical performance
Over the years, Byco Petroleum's financial performance has improved where gross margins have steadily increased, while net margins too have come out into the profitable zone.
FY15 was extremely challenging for the entire oil sector and especially for the refineries that witnessed a sharp decline in crude and product prices, which continued throughout the first half of the year. During the initial six months of year, prices dropped by approximately 55 percent amidst the global supply glut in the oil markets.
However, FY15 turned out to be the year where the firm turned to profits. During the year, Byco Petroleum Pakistan Limited witnessed increased volumes, but revenues suffered at the expense of low oil prices. The company enhanced its oil marketing business by expanding its retail outreach. Improvement in gross profit however, came from increase in sales volume coupled with increased level of production that resulted in high absorption rate of manufacturing overheads and improved marketing margins. Moreover, an effective supply chain management coupled with a lower inventory holding period allowed the company to curtail its inventory losses.
FY16 was another challenging year for the oil sector as declining price trend continued to persist. Byco witnessed a fall in revenues by 16 percent year-on-year. However, volumes continued to move up, High sales volume, import of products at competitive pricing and improved marketing margins lifted the earnings up staggeringly when compared to FY15.
Financial performance FY17 and beyond
FY17 was a year where the firm's earnings went up by over 50 percent, year-on-year. The year also marks the bringing back of the 120,000 bpd refinery into operations, which added the charm to the firm's profitability.
During the year, Byco Petroleum Pakistan Limited issued AAA rated Sukuk certificates worth Rs 3.2 billion to raise capital for a few of the expansion plans, which were oversubscribed.
FY17 also marks the year where declining oil price trend came to an end. These along with higher sales volumes, especially those of Motor Gasoline, were the growth factors for Byco. Also better refining and marketing margins and import of products at competitive pricing helped the company.
The firm continued to increase its penetration in retail sector through its 300 retail stations across the country. Byco Petroleum Pakistan Limited also for the first time in Pakistan, brought crude vessel of over 102,000 metric tons at its SPM facility - largest crude vessel ever berth in any port of Pakistan.
Despite a 50 percent increase in earnings, the firm's EPS declined due to the issuance of 5.1 billion shares in respect of the merger of BOPL and BTPL. However, the EPS is expected to improve in the future with the operations of a larger refinery.
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Byco Petroleum Pakistan Limited
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BYCO-Pattern of Shareholding (as of 30th June, 2017)
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Shareholders Category %
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Associated Companies, Undertakings and Related Parties-BOPL 91.83
Executives 0.001
NIT and ICP -
Directors, CEO and their spouse and minor children 0.00
Banks, Development Financial Institutions, Non-Banking Finance Institutions 4.66
Modarabas and Mutual Funds 0.02
Insurance Companies 0.005
Others 0.253
General Public 3.23
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Total 100
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Byco Petroleum-Financial Ratios-Six Year Summary
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FY12 FY13 FY14 FY15 FY16 FY17
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Profitability Ratios
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Gross Profit % -8.82 0.12 0.45 5.13 5.51 5.21
Net Profit % -15.82 -3.41 -6.42 0.08 1.76 2.4
EBITDA Margin to sales % 4.76 2.67 -1.83 4.44 5.73 7.31
Return on equity % -270.0 66.23 -117.52 1.39 20.86 8.18
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Liquidity Ratios
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Current Ratio Times 0.39 0.70 1.02 0.52 0.53 0.37
Quick/Acid Test Ratio Times 0.31 0.50 0.78 0.39 0.34 0.15
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Activity Ratios
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Inventory turnover 6.58 11.60 12.72 13.19 12.04 8.43
Debtors turnover Times 2.00 5.46 8.27 9.68 8.81 13.48
Creditors turnover Times 0.82 3.29 3.83 3.05 2.58 2.47
Total assets turnover ratio Times 0.50 1.51 1.56 1.71 1.39 0.78
Fixed assets turnover ratio Times 1.06 3.76 6.20 6.91 6.18 1.21
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Capital Ratios
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Interest coverage ratio Times (0.08) 0.28 (0.96) 1.06 1.41 1.64
Debt to equity ratio Times (2.21) (3.03) (1.77) (615.14) 12.1 2.04
Earnings per share Rs. (3.15) (2.31) (6.07) 0.07 1.4 0.4
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Source: Company Accounts