ATRL eyes profit expansion as capacity utilization, product yields recover

Mettis Global reported that Attock Refinery Limited (ATRL) is set to lead a structural change in Pakistan's oil refining sector, which relies on imports for petrol and diesel. A revised Brownfield Refinery Policy is expected to unlock US$ 5 billion to US$ 6 billion of investment across the sector, shifting output toward white products. As the country's most northerly refiner, ATRL is well placed to benefit, with its 53,400 bpd capacity projected to rise toward full use as northern crude supply improves on discoveries such as Baragzai.

Under the revised framework, eligible refiners levy a 10% deemed duty on petrol and diesel, with part routed into a shared escrow account that can repay up to 27.5% of qualifying investment after completion. The upgrade adds a catalytic reforming unit and improves diesel desulphurisation, lifting ATRL's MS yield from 38% to 45% while furnace oil falls to 17%. Removing quality penalties and cutting chemical costs are estimated to yield roughly Rs5 billion in annual pre-tax savings.

Cash and short-term investments stand at about Rs1,093 for each share, a total of Rs116.5 billion, which the report says allows ATRL to fund capex internally with limited debt. Set against NRL, PRL and CNERGY, ATRL is shown with the lowest upgrade capex requirement, while its locally produced northern crude has historically been priced 4% to 6% below Arab Light benchmarks.