Pakistan-based blender Hi-Tech Lubricants Ltd. finished 2020 with strong increases in profit and sales for the quarter that ended Dec. 31, with lower finance costs helping offset increases in total and tax expenses.
The Lahore-headquartered company reported consolidated net profit grew 100% to 215.6 million Pakistan rupees (U.S. $1.4 million) for the quarter – the second of Hi-Tech’s fiscal year – up from Rs 107.7 million in the year-earlier period, according to its financial statement.
The blender’s other income increased 12% to Rs 41 million for the quarter.
Net sales in the quarter jumped 75% to Rs 2.8 billion, improving from Rs 1.6 billion.
Total expenses rose 24% to Rs 361 million for the quarter, and finance cost fell 71% to Rs 22.1 million. Tax expenses rose 78% to Rs 43.3 million.
For the six months ended Dec. 31, Hi-Tech recorded a $304.8 million net profit, marking a sharp turnaround from a consolidated net loss of Rs 134.4 million in the same period in 2019. Six-month revenue for the lubricants segment reached Rs 3.8 billion, a sharp 81% increase from the same period in 2019.
In its financial statement’s director’s review, the company noted its wholly owned subsidiary – Hi-tech Blending (Private) Ltd. – played an important role in the growth of its lubricants segment. “The plant started local blending of products in January 2019 and during the period under review [in 2020] saw a 47% volumetric growth over the same period last year [in 2019],” the company said. “We expect the blending plant to continue its strong volumetric and profitability growth in the future. Therefore, the group is expanding its blending facilities with the addition of machinery for blow moulding, storage tanks and filling lines.”
Hi-tech noted that, “despite the relentless continuation of the COVID-19 pandemic, the country’s economy stayed on course to recovery in the [half year ended Dec. 31] period under review. Although the government of Pakistan has not announced a complete lock down during the period, imposition of small lock downs in various areas, coupled with the requirement to work minimum staff at offices, posted a test for the business environment, albeit at a much more manageable level compared with the first half of 2020.”
The company observed that the country’s automobile industry witnessed significant growth as new entrants come to market. “This will eventually lead to growth in the lubricants market in the future, particularly for premium grades,” said the company, which distributes SK Lubricants’ Zic brand of finished lubes.