⚡ Flash Summary

Cnergyico Pk Limited’s FY25 corporate briefing reveals mixed results. Revenue increased by 31% due to higher refinery throughput, but gross profit significantly declined by 60% due to weaker Gross Refining Margins (GRMs) and inventory losses from a declining price trend. The company’s Oil Marketing Business (OMB) saw revenue increase to PKR 116 Billion, up from PKR 104 Billion last year. Despite challenges, Cnergyico maintains its overall 6th position in the country’s oil market share.

📌 Key Takeaways

• ⬆️ Gross revenue increased by 31% in FY25, driven by higher refinery throughput.
• 📉 Net revenue increased by 23% in FY25.
• 📉 Gross profit decreased by 60% to PKR 4.99 billion due to weaker GRMs and inventory losses.
• 📉 Gross profit margin decreased significantly from 5.17% to 1.68%.
• 📉 Operating profit decreased by 77% to PKR 2.551 billion.
• 📉 Loss before taxation of PKR (2.209) billion compared to profit last year.
• 📉 Loss after taxation of PKR (2.895) billion compared to profit last year.
• 📉 EBITDA decreased by 47% to PKR 9.438 billion.
• ✅ Finance costs reduced to half from PKR 9.4 Bn to PKR 4.7 Bn due to lower KIBOR rates.
• 📈 Revenue of Oil Marketing Business increased to PKR 116 Billion from PKR 104 Billion last year.
• ⛽ The Oil Marketing Business (OMB) has 470+ retail outlets.
• 🌍 Cnergyico is importing crude oil from the United States for the first time.
• 🛠️ Refinery upgrade project initiated with a cost of more than $1 Billion.
• ⛽ Average product spreads of PMG & HSD decreased 23% & 30% respectively in FY 2025 as compared to FY 2024.
• ⛽ Average product spreads of FO also decreased 46% in FY 2025 as compared to FY 2024.

🎯 Investment Thesis

HOLD. Cnergyico’s FY25 performance was negatively impacted by lower GRMs and inventory losses, resulting in a loss for the year. While revenue increased, profitability declined significantly. The company’s refinery upgrade project could improve future performance, but there are significant risks related to financial performance and regulatory changes. A HOLD recommendation is appropriate until the company demonstrates improved financial performance and navigates the regulatory landscape successfully. Price Target: Undetermined. Time Horizon: Medium Term.