Hascol Petroleum Limited

Report
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Hascol Petroleum Limited
HPL was incorporated in 2001 under the Companies Ordinance, 1984 primarily to take advantage of
the petroleum sector deregulation and undertake a program for owning, leasing and renting oil
storage facilities as well as importing petroleum products for its own account.
In February 2005 HPL was granted a full marketing license by the Government of Pakistan and since
then, HPL has been engaged in developing a retail network and storage facilities under the Hascol
brand and by 31st December 2013the Company had commissioned approximately 210retail outlets
across Pakistan and this number is expected to reach 291 by the end of 2016.
The Directors and sponsors of the company have decades of Multinational companies experience in
Oil Trading, Retail & Marketing & Supply chain management.
HPL management team comprises of well experienced staff from each segment of the oil industry who
have worked in local and multinational oil companies for many years and have ability to do things
right.
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Hascol Petroleum Limited
Market Share of Oil Marketing Companies
Company
Market Share(%)
Listing Status
No. of Retail Outlets
Market Price*
Pakistan State Oil
63.12
Listed
3,760
PKR 345
Shell Pakistan Limited
9.91
Listed
798
PKR 210
Attock Petroleum Limited
9.10
Listed
362
PKR 508
Chevron Pakistan Limited
4.43
Branch Office
518
-
Total-Parco Pakistan Limited
3.80
Non Listed
260
-
Hascol Petroleum Limited
2.70
Under Listing
210
PKR 20**
Byco Petroleum Limited
1.70
Listed
219
PKR 9
Bakri Trading Co. Pakistan (Private) Limited
1.79
Pvt. Limited
47
-
Askari Oil Services (Private) Limited
0.14
Pvt. Limited
294
-
Overseas Oil Trading Co. (Private) Limited
0.11
Pvt. Limited
109
-
Zoom Petroleum (Private) Limited
0.05
Pvt. Limited
12
-
Admore Gas (Private) Limited
0.05
Pvt. Limited
442
-
Pearl Parco (Private) Limited
3.10
Pvt. Limited (Non OMC)
0
-
(Source: OCAC Oil Report July-Dec- 2013)
*Price quoted as at January 16, 2014
**Book Building Floor Price
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Hascol Petroleum Limited
Phenomenal Growth
(Rs in millions)
Description
2013
2012
2011
Fixed Assets
2,286
1,724
877
Current Assets
6,707
2,595
1,136
Equity (Including Revaluation)
1,444
1,065
460
Current Liabilities
7,630
3,067
1,686
Sales (in Thousand Liters)
619,923
341,738
259,910
Sales
57,441
29,775
19,584
Gross Margin
1,320
996
699
Operating Profit / (Loss)
548
393
257
Finance Cost
110
101
202
Profit Before Tax
438
292
43
Profit After Tax
392
218
82
Earnings per Share
5.97
3.33
1.94
Break-up Value per share (with Revaluation)
22.02
16.24
7.01
Break-up Value per share (w/oRevaluation)
16.55
10.20
6.71
Current Ratio
0.88:1
0.85:1
0.67:1
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Hascol Petroleum Limited
KEY TO SUPERNOVAL PERFORMANCE
Supernova is extremely luminous and
cause a burst of radiation that often
briefly outshines an entire galaxy
At the Helm of Leadership
HASCOL is navigated by the leadership and guidance of some of the best and
most experienced minds in Oil Industry
Supply Chain Management–Game of Supply In Pakistan
The business case of HASCOL has been developed with a combination of Game
of Supply in Pakistan and Retailing
The Thrust of Success – Products & Services
HASCOL’s products and services act much like the navigational propeller giving
our ship all the essential thrust towards success.
We cater a large network of retail outlets and a wide range of petroleum products
and lubricants.
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Hascol Petroleum Limited
At the Helm of Leadership
HASCOL is navigated by the leadership and guidance of some of the best and most
experienced minds in Oil Industry
Mr. Mumtaz Hasan Khan– Chairman & C.E.O
Mr. Mumtaz Hasan Khan has over 50 year of experience within the oil industry. He started his career with Burmah Shell Oil Storage and Distribution
Company in May 1963. In January 1976 Mr. Mumtaz resigned from the post of International Sales Manager to join Pakistan Services Limited as
Managing Director. Pakistan Services Limited was the owning company of four Intercontinental Hotel (now known as Pearl Continental Hotel) in Pakistan
at that time. In 1980 Mr. Mumtaz left Pakistan Services Limited and moved to London.
He established Hascombe Limited, which started trading in Crude Oil and Petroleum Products. Hascombe bought petroleum product from Middle Eastern
sources and sold to international trading companies like Shell and Elf. Hascombe was also a major supplier of petroleum products to Pakistan during
1991 till 1996.
In 2005 Hascol was granted an oil marketing license by the government of Pakistan in Pakistan. Hascol has established a network of 200 Petrol Pumps
all across Pakistan including Azad Jamu and Kashmir.
Mr. Mumtaz Hasan Khan is currently also serving as Chairman of Sigma Motors (Sole distributor of Land Rover vehicles in Pakistan).He is a Trustee of
the Foundation of Museum of Modern Art (FOMMA) located in Karachi and the member of the Expert Energy Group which prepared Pakistan’s first
Integrated Energy Plan in 2009.
Dr. Akhtar Hasan Khan – Director
Mr. Najmus Saquib Hameed – Director
Dr Akhtar Hasan Khan is a former civil servant. He retired as
Secretary Planning for the Government of Pakistan. Dr. Akhtar
holds a Masters in Public Administration from the University of
Harvard and a PHD in economics from the TUFFs University in
USA. Dr. Akhtar served as Secretary Education, Additional
Secretary Finance, Additional Secretary Commerce and additional
secretary ministry of production. Dr. Akhtar has served on the
board of public organization such as Pakistan International Airline,
National Development Finance Corporation, Pakistan Automobile
Corporation and Chairman of the Pakistan Ghee Corporation. Dr
Akhtar is the author of several publications; his recent book was
called “the impact of privatization in Pakistan”. He is a Director of
Sigma Motors Limited.
Mr. Najmus Saquib Hameed is the honorary Vice Chairman and C.E.O of
Layton Rehmatullah Benevolent Trust (LRBT). LRBT is one of the largest
charitable organizations in Pakistan providing free eye care to over 2
million patients through a network of 17 hospitals annually. He has over 47
year of experience in Senior Management position with multinational
organization such as Unilever and Pakistan Tobacco where he retired as
Chairman of the Company. Mr. Najmus Saquib holds a Master in
International Relations and was a gold medalist at Institute of Business
Administration (IBA). He has served as Chairman of the Cigarette
Manufacturers Association and past Chairman Board of Governor at the
Indus Valley School of Art and Architecture, Karachi. Mr. Najmus Saquib
Hameed is currently serving on the board of NIB Bank Limited and Sigma
Motors Limited.
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Hascol Petroleum Limited
At the Helm of Leadership
HASCOL is navigated by the leadership and guidance of some of the best and most experienced minds in Oil
Industry
Mr. Farooq Rahmatullah– Director
Mr. Rahmatullah is law graduate from the University of Peshawar. He joined Burmah Shell and Oil Distribution Company in 1968. Mr. Rahmatullah worked in various
capacities with the organization i.e. Chemical, Human Resource, Marketing, Supply, Distribution and Retail. In 1994 Mr. Rahmatullah was transferred to Shell International
London as Manager Business Strategy Division. He looked after various portfolios covering 140 countries. In 1998 he was transferred back to Pakistan as Head of
Operations Shell Pakistan. Mr. Rahmatullah was also looking after Middle East and South Asia (MESA).In 2001 he was appointed managing director Shell Pakistan Limited
a post he retired from in June 2006.
Mr. Rahmatullah is credited with being the founding member of PAPCO (Pak Arab Pipeline Company limited). He has also served as the Director General of Civil Aviation
Authority, Chairman of the Oil and Gas Development Authority, Chairman of LEADs. Since 2005 he has been chairman of the Pakistan Refinery Limited. He is currently
serving on the Board of Director of Faysal Bank Limited, Society of Sustainable Development, and Resource Development Committee for the Agha Khan Hospital. He is
also the Group Founding Member of the Pakistan Human Development Fund and a member of National Commission of Government Reform and Member of the Pakistan
stone Development Company. He is the Chairman of Pakistan Refinery Limited and Non-Executive Director of Faysal Bank Limited.
Mr. Liaquat Ali – Director
Mr. Liaquat Ali is a Chartered Accountant by
profession and a fellow member of the
Institute of Charted Accountants of Pakistan
(ICAP). He has over 18 years of experience
in leasing and investment banking field and
has completed numerous transactions
including restructuring of companies,
merger and Acquisition.
Mr. Liaquat Ali is a member of one of the
leading Chartered Accountant firm Avais
Hyder
Liaquat
Nauman
Chartered
Accountants (AHLN). AHLN is a member of
RSM international which is the 7th largest
network of accounting and consulting firms
in the world[1]. AHLN has offices in Lahore,
Karachi, Peshawar, Faislabad, Islamabad,
Quetta and Kabul (Afghanistan). He is also
a member of the benevolent fund committee
of ICAP.
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Mr. Sohail Hasan – Director
Mr. Sohail is a Chartered Accountant
and a member of the Institute of
Chartered Accountants in England and
Wales and the Institute of Chartered
Accountants of Pakistan. He was a
partner in a leading accounting firm
A.F.Ferguson & Co. for over 35 years
and has also served as its senior
partner. He has served as the member
of the Provisional Financial Commission
Punjab and is currently a member of the
Corporate Law Review Commission of
Pakistan. He is a Non-Executive
Director of Habib Metropolitan Bank
Limited.
Mr. Saleem Butt – Chief Operating Officer& Executive
Director
Mr. Saleem Butt has achieved a diversified 22 year career
in Finance, Corporate Affairs, Supply Chain, Sales,
Management, Human Resource, I.T and ERP
implementation. Mr.Butt started to work as a Chartered
Accountant for a firm which is now a part of Price
Waterhouse Coopers. He then worked with various Shell
Group of companies in Pakistan and overseas for 14 years.
He was then offered a position with Emaar Pakistan a
subsidiary of Emaar PJSC, U.A.E as Chief Operating
Officer (COO).
Mr.Butt is a Chartered Accountant and holds a Bachelor
Degree in Commerce from the University of Karachi. He
received his fellowship from the Institute of Chartered
Accountants of Pakistan in 2004. He also serves as nonexecutive director on the boards of Pakistan Refinery
Limited, TRG Pakistan Limited and Sigma Motors Limited.
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Hascol Petroleum Limited
Supply Chain Management–Game of Supply In Pakistan
Storage Facilities
HPL has developed state-of-the-art
storage facilities at strategic locations that
fully cover its retail network. The existing
storage facilities currently operating under
the banner of HPL are as follows:
Serial
Facility
Ownership
Capacity
1
Port Qasim
Long-term agreement - VTT Port Qasim (Pvt.) Ltd.
32,400
2
Kemari
Long-term agreement - Al-Raheem Trading
12,150
3
Kemari Import Terminal
Long Term Lease Agreement with Al-Abbas Group
15,000
4
Shikarpur
HPL owned
6,500
5
Machike
HPL owned
6,500
6
Amangarh
Long-term lease agreement - an option to buy
1,500
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In order to further enhance
its capacity the Company is
in the process of acquiring a
land at Mehmood Kot,
Punjab adjacent to Pak-Arab
Refinery Limited. This will
facilitate the Company to
cover its supply in the
Southern Punjab envelope.
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Hascol Petroleum Limited
Supply Chain Management–Game of Supply In Pakistan
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Hascol Petroleum Limited
Supply Chain Management–Game of Supply In Pakistan
EFFICIENT LOGISTICS NETWORK
HPL’s logistics network provides the Company with an
efficient value chain that drives the Logistics
department is the backbone of an oil marketing and
distribution company. Hascol Petroleum Limited does
not compromise on quality and quantity of petroleum
products.
HPL is maintaining its logistics policy wherein we
ensure the deliveries of safe and sound condition to the
valued customers. Tank Lorries registered with HPL are
duly calibrated by weights & measures, and designed
as per rules required by 'OGRA' and 'Ministry of
Petroleum and Natural Resources'.
HPL has got 19 registered contractors maintaining a
fleet of 1,300 Tank Lorries for Black Oil and 350 Tank
Lorries for White Oil.
HPL all the tank lorries are registered in HPL state of
the art ERP system JD Edwards to control the logistics
data and product movement and time log, as well. The
cartage contractors have to provide the tank lorries as
per demand of HPL Cartage Agreements.
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Hascol Petroleum Limited
The Thrust of Success – Products & Services
HASCOL’s products and services act much like the navigational propeller giving our
ship all the essential thrust towards success.
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Hascol Petroleum Limited
FUTURE GAME PLAN
HPL has doubled its sales volume and profitability on year to year basis. During the last three years
this growth has resulted in a market share from 1% to 2.6% up to October 2013 (Source OCAC
Report), from 2014 and onwards within 02 years the company has a target to achieve a volumes of
1,000,000 MT with a market share of 5%. This growth will be achieved through:
1. Completion of its Machike Installation
2. Development of an Installation at Mehmood Kot
3. Depots at Sahiwal and Shershah
4. Increase in its retail outlets from 210 to 291 by the end of 2016
5. Development of Aircraft Refueling Station (JET-A1) at Karachi Airport. After PSO, HPL is
the only OMC which has got a TSA from an International Operator to sell Jet A-1 to airlines.
6. Development of a Lubricants and Grease Plant by end of 2016.
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Hascol Petroleum Limited
FUTURE GAME PLAN
HASCOL PETROLEUM LIMITED
PROJECTED PROFIT & LOSS ACCOUNTS
Profit & Loss Accounts
Weighted Average Cost of Capital
Amount in PKR '000 Risk Free Rate
Description
Sales - Gross
2014 (E)
76,823,122
2015 (E)
97,504,087
2017 (E)
2018 (E)
118,562,926
128,846,213
151,455,929 Beta
66,597,535
84,525,748
102,781,537
111,696,061
131,296,298
Cost of Sales
(65,032,134)
(82,566,407)
(100,446,724)
(109,148,115)
(128,555,807)
Gross Profit
1,565,401
1,959,341
2,334,814
2,547,946
2,740,492
Selling & Distribution Expenses
(621,784)
(639,705)
(705,548)
(763,697)
(797,313)
Administrative Expenses
(229,706)
(249,201)
(275,858)
(306,121)
(340,398)
Operating Profit
713,910
Finance Cost
(106,795)
(101,692)
(125,652)
(154,395)
Other Income
94,631
101,756
107,621
114,792
701,747
1,070,499
1,335,377
1,438,525
89,053
113,027
137,438
149,358
Profit Before Taxation
Taxation
Profit After Taxation
EPS
1,070,435
1,353,407
1,478,128
612,693
957,473
1,197,939
1,289,167
6.76
10.57
13.22
14.23
1,602,781
(132,036)
1,418,659
2.27%
2.28%
2.09%
NP Margin
0.80%
0.98%
1.01%
1.00%
0.94%
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1.00
1.06
1.13
1.24
1.30
28.19
38.73
51.93
66.14
81.77
24.26
34.83
48.05
62.28
1.07
Average OMC Beta (PSO & SHELL)
Cost of Equity
17.92%
Ke = Rf + (Rm-Rf)Beta
Terminal Growth Rate
2.00%
Sustainable Growth Rate
Tax Rate
35.00%
Corporate Tax Rate
Cost of Debt
13.50%
1 - Year KIBOR + 3.00%
Debt to Equity
21.67%
Debt to Equity Ratio
WACC
15.94%
Weighted Average Cost of Capital
Terminal Value:
Terminal Growth Rate
Terminal Value (Current) (PKR)
2.00%
15.94%
626,296
4,493,335
2,145,032
15.66 DCF Valuation:
2.32%
Breakup Value w/o Revlauation
Standard Convention by Consensus Analyst
175,568 Terminal Value (FY2018) (PKR)
2.35%
Breakup Value with Revlauation
6.00%
123,481 Terminal WACC
1,594,226 Estimated Terminal Free Cash Flow (PKR)
GP Margin
Current Ratio
5 - Year PIB Rate
Market Risk Premium
2016 (E)
Sales - Net of Sales Tax
11.50%
77.94
NPV of Forecasts (PKR)
1,615,652
NPV of Terminal Value (PKR)
2,145,032
Enterprise Value / Cashflow Generated
3,760,684
Less: Net Debt (Net Cash)
Equity Value (PKR)
Total Valuation (PKR)
No of Shares
(157,642)
3,603,042
3,603,042
90,600,000
Per Share Equity Value (PKR)
39.77
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Hascol Petroleum Limited
Right Partner For Your Business – Year 2013 under review
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Hascol Petroleum Limited
Hascol Petroleum Limited
Right Partner For Your Business
IPO Summit 2014
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