Shell Pakistan Announces Profit of Rs.1.13 Billion for three months

Shell Pakistan Limited, a subsidiary of Shell Petroleum Company Limited, announced a profit of Rs 1.13 billion for the three months ending June 30, 2024. This figure, revealed in a notice to the Pakistan Stock Exchange on Monday, reflects a dramatic decline of over 86% compared to the Rs 8.3 billion profit recorded during the same period last year.

Earnings Per Share Take a Hit

The substantial drop in profits has significantly impacted Shell Pakistan’s earnings per share (EPS), which fell to Rs 4.69, down from Rs 38.79 in the previous year. This decline highlights the challenging economic landscape Shell Pakistan is currently navigating, especially after the company had previously bounced back in 2023 with a profit of Rs 6.2 billion following losses in 2022.

Revenue Growth Yet Declining Gross Profit

Despite the notable drop in net profits, Shell Pakistan reported a nearly 9% increase in net revenue for the quarter, rising to Rs 112.45 billion, up from Rs 103.46 billion in the same quarter the previous year. This growth in revenue indicates that demand for Shell’s products remains robust.

However, the company’s gross profit declined slightly by nearly 1%, falling to Rs 5.95 billion compared to Rs 5.99 billion in the same period last year. The decrease in gross profit is largely attributed to a more than 10% increase in the cost of products, which has significantly squeezed profit margins.

The latest financial results from Shell Pakistan reflect a complex scenario where increased revenues have not translated into higher profits, largely due to rising costs. As the company moves forward, it will need to address these challenges to stabilize its profit margins and enhance shareholder value in the face of an evolving market environment.

Afsheen Gohar

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