Pakistan’s Byco Petroleum Forecasts First Profit in 6 YearsFaseeh Mangi and Daniel Ten Kate
Byco Petroleum Pakistan Ltd., which runs a 35,000 barrels-a-day refinery, expects to post its first annual profit in six years as steps to cut costs take effect and sales climb.
The company forecasts sales will rise to 92 billion rupees ($872 million) in the year ending June, Amir Abbassciy, chief executive officer at Byco’s parent, said in an interview in Karachi. Byco Industries Inc. plans to start a second refinery this month to process 120,000 barrels of oil a day, which will make the group Pakistan’s biggest refiner, followed by Pak Arab Refinery Ltd., he said.
Byco is seeking to tap rising demand in South Asia’s second-biggest economy, where dwindling natural gas supply is seeing power producers and vehicle owners shift to petroleum products. Pakistan’s annual consumption of petroleum products is above 21 million tons, of which about 9 million tons comes through imports.
“Pakistan’s petrol and diesel imports will come down after the refinery starts,” Vahaj Ahmed, an analyst at Topline Securities Pvt. Ltd., said by phone in Karachi. “Pakistan will save approximately $800 million annually on imports.”
An offshore loading buoy installed in January last year with a pipeline to Byco Petroleum’s refinery enabled it to receive crude oil from large tankers, save on transport costs and raise capacity utilization, Abbassciy said.
“When we used to run on crude oil transported from the port through trucks, we could not run more than 20,000 barrels a day because we couldn’t get more,” he said. “We can now run at 30,000-35,000 barrels a day.”
Byco Petroleum’s shares rose 2.3 percent to 10.90 rupees at 9:44 a.m. on the Karachi Stock Exchange. The stock has declined 24 percent in the past year, compared with a 55 percent gain in the benchmark KSE100 Index.
The group plans to invest $250 million to build a petrochemicals plant that will take 18 months to complete from the start of construction in July, Abbassciy said.
Byco Petroleum’s loss widened 36 percent to 4.95 billion rupees in the year ended June, according to data compiled by Bloomberg.