Quarterly Report For The Financial Period Ended 30 June 2018
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Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Second Quarter Ended 30 June 2018
Condensed Consolidated Statement Of Financial Position As At 30 June 2018
Financial review for current quarter and financial year
The Company recorded higher revenue in the current quarter and cumulative period ended 30 June 2018, against corresponding periods last year. Market quoted product prices in the current quarter and 6-months period averaged at USD84 per barrel and USD80 per barrel respectively, higher than the average prices of USD62 per barrel and USD 61 per barrel in the respective comparative periods. The refinery recorded sales volumes of 10.8 million barrels and 21.0 million barrels for the current quarter and cumulative periods. Last year’s sales volumes for both periods were lower by approximately 1 million barrels as the refinery underwent a planned minor turnaround for its smaller crude distiller in May 2017.
Gross profit for the current quarter reflected a FIFO margin of USD7.64 per barrel (including a stockholding gain of USD4.28 per barrel), compared to FIFO margin of USD5.98 per barrel (including a stockholding loss of USD1.71 per barrel) for the same period last year. Lower average margins (excluding stockholding gains/losses) for the current and cumulative periods are due to lower market mogas and middle distillate cracks amidst increasing crude prices and high inventories in the region.
Manufacturing expenses for the current quarter and cumulative periods were lower as the comparative performance included expenditure on a planned minor turnaround maintenance. Administrative expenses for the current periods include accruals for functional services from holding company. The Company also recorded a loss on foreign currency exchange as the RM weakened against the US Dollar in the current quarter. Finance costs for the current quarter reflects the lower interest rates applicable on the new term loans and revolving credit facilities.
Current Year Prospects
Refining margins are expected to remain volatile in the near term based on published forward market prices and refining margins. Operational efficiency, safety performance, product quality, hydrocarbon hedging and financial risk management continue to remain as key areas of focus in optimising the Company’s performance.
The Company is currently undergoing a planned major statutory turnaround which commenced on 6 August 2018 and is expected to complete late October 2018. Accordingly, revenues for the current financial year will reflect the anticipated reduction in sales and production volumes.