For the three months ending June 30, 2024, Shell Pakistan Limited, part of Shell Petroleum Company Limited, saw a significant decline in profit. On Monday, it was announced that the profit amounted to Rs1.13 billion. This figure marks an extraordinary drop of more than 86% compared to the Rs8.3 billion profit recorded in the comparable quarter of the previous year.
The decrease in profit has had a substantial impact on Shell Pakistan’s earnings per share, which fell to Rs4.69 from Rs38.79 a year ago. Although the company had shown recovery in 2023, recording a profit of Rs6.2 billion after a loss in 2022, the latest figures reveal a period of financial difficulty.
Despite these challenges, Shell Pakistan’s net revenue for the quarter ending June 30, 2024, increased by nearly 9%, reaching Rs112.45 billion, up from Rs103.46 billion the previous year. This rise in revenue indicates that sales have improved.
However, this revenue growth did not translate into higher gross profits. The company’s gross profit slightly declined by about 1%, falling to Rs5.95 billion from Rs5.99 billion in the same quarter last year. The drop in gross profit can be attributed to a more than 10% rise in the cost of products, which has adversely affected profit margins.
Thus, while revenue increased, the overall financial performance of Shell Pakistan has been challenged by higher costs and reduced profitability.
