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BYCO Petroleum Pakistan Limited(BYCO) Company Overview: -

Sarmaaya Desk
Sarmaaya Content Team

BYCO Petroleum Pakistan Limited (the Company) was established as a public limited company in Pakistan on January 9, 1995, under the Companies Ordinance, 1984, which has since been repealed. Oil Refinery Business and Petroleum Marketing Business are the two business segments that the company now runs. In 2007, the Petroleum Marketing Business was formally launched.

BYCO converts crude oil into several saleable components such as Liquefied Petroleum Gas, Light Naphtha, Heavy Naphtha, High Octane Blending Component, Motor Gasoline, Kerosene, Jet Fuels, High-Speed Diesel, and Furnace Oil, with a daily capacity of 155,000 barrels it has the largest refining capacity in Pakistan.

BYCO chose to enter the petroleum marketing business in 2007 and opened its first retail location, and the company's retail network has developed significantly since then.

Company snapshot:
Byco company snapshot

The total market value of BYCO at present share price is Rs. 53.14 Billion

Sales and Profits: -

The table shows the sale and the gross profit that the company has made in some previous years. All values are in thousands:

  2020 2019 2018 2017 2016 2015
Sales 173,898,930 197,830,720 166,290,362 88,572,580 77,702,167 94,807,329
Gross profit 2,896,444 1,959,777 9,149,821 4,615,903 4,282,674 4,866,496
BYCO’s Performance: -

BYCO has been a stock that many investors have invested in. In the past BYCO was considered as one of the good value stocks. In 2018 it had a good EPS and it was deemed to be a good investment. But recently due to corona and increase in exchange rate the oil marketing companies have suffered a heavy blow and BYCO is not an exception. BYCO is also a very volatile stock as compared to other stocks in the same sector and even in the Pakistan Stock Exchange. The volatility can be seen from the 52 week high and low stock prices. On the other hand, we can see that BYCO is selling at a very overvalued price. As the price to book ratio in the year 2018 was 2.22 although it decreased in the years 2019 and 2020. Still, the stock is selling at a significantly higher price than the actual book/fair value.

The P/E ratio is also 21.67 which is very high regarding the sector. A high P/E ratio means that the price is high and the earnings are low leading to BYCO being an overvalued stock and has a poor value as a stock for investment.

Earning per share

The EPS can be seen to decrease and become negative from 2018 to 2019 which shows us that the company has not been profitable in FY19 and FY20 which means that at this moment BYCO is not a good investment as the profits compared to its share price are very low rather in negative

Net Profit Margin vs Gross Profit Margin

The net and gross profit margin can be seen decreasing.
This means that the company is not performing well and the company has been shambled in years when corona was at its peak.
The company has also not given any dividend in three previous years.
This means that BYCO is not a safe or reliable investment for investors.
Sufficient information is also not available for predicting the future of BYCO as a Stock.

Financial Health: -

(All values are in thousands):

  2020 2019 2018 2017 2016
Assets 126,016,153 130,142,717 129,751,970 109,839,141 55,893,749
Liabilities 99,815,337 101,924,489 99,530,202 87,921,217 49,338,320
Equity 25,343,676 27,361,088 29,380,519 21,156,794 6,555,429

BYCO has short-term assets but they cannot meet the short-term liabilities of the company but they can still cover the long-term liabilities at the same time.

BYCO’s management has also been evasive of media and their rumors speculating that they have created an artificial shortage of petrol so they can benefit from the higher prices afterward.
Although they have been in denial of this. Still from the above analysis, it can be concluded that BYCO is not a safe share to invest in and can be dangerous.

BYCO is not a good investment and people who want to play safe must not buy the stock as it can drop value at any given time.

 




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