Inflation-Driven Revenue Rescues Behran Oil / Shabehran Output Down 30% in Shahrivar + Chart

Behran Oil recorded a 30% drop in production and a 32% fall in sales in Shahrivar 1405 compared with Shahrivar last year, while the company's revenue rose 80%. The divergence suggests that a jump in sales prices has masked a decline in activity volume, at a time when production has also fallen compared with last month.

According to Ambassador Arjan, Behran Oil Company with the symbol "Shabharan", 30% of whose shares belong to Mustafafan Foundation, is one of the long-standing producers of lubricants and industrial and motor oils in the country. The performance of this company is particularly important; Because the diversity of its products, from gasoline and diesel engine oil to base oil, process oils, paraffin wax, and grease, allows simultaneous examination of production, sales, and income.

However, the statistics of Shahrivar 1405 provide a negative picture of the operational performance of Shahbaran. The company's total production has decreased, sales have not reached last year's level, and an important part of the main products, especially diesel engine oil and process oils, have faced a sharp drop in volume. On the other hand, the increase in the sales rate has caused the company's income to grow; The growth that indicates more than the development of operational activity, comes from the increase in prices and the effect of inflation on the sale of products.

The more important point is that the production of Shahbarn in Shahrivar 1405 also decreased compared to the previous month and reached the lowest level after the war. An issue that, along with the annual sales drop, highlights the necessity of a more detailed examination of the company's production situation.

30% drop in production and withdrawal of main products

The total production of Bahran oil has increased from 61 million 537 thousand liters in September 1404 to 43 million 48 thousand liters in September 1405. In this way, the company's production in September 1405 compared to September 1404 has decreased by 30%; A drop that shows that the production activity of Shehburn has become significantly smaller.

Among the main products, the production of gasoline engine oil has decreased from 12 million 148 thousand liters in September 1404 to 5 million 705 thousand liters in September 1405 and has dropped by 53%. The condition of diesel engine oil is also more unfavorable; The production of this product increased from 12 million 327 thousand liters in September 1404 to 4 million 666 thousand liters in September 1405 and decreased by 62%.

The production of process oils or extract has also reached from 20 million 532 thousand liters in September 1404 to 13 million 756 thousand liters in September 1405 and has dropped by 33%.

On the other hand, the production of industrial oils increased by 3%, from 6 million 279 thousand liters in September 1404 to 6 million 480 thousand liters in September 1405. The production of base oil also increased from 3 million 767 thousand liters in September 1404 to 4 million 211 thousand liters in September 1405 and increased by 12%.

The production of other products also increased from 2 million 894 thousand liters in September 1404 to 4 million 466 thousand liters in September 1405 and increased by 54%. Paraffin wax has grown by 11% with the production of 3 million 192 thousand liters in September 1405 compared to 2 million 884 thousand liters in September 1404. Antifreeze production has also increased from 377 thousand liters in September 1404 to 388 thousand liters in September 1405 and has increased by 3%. On the other hand, the production of grease has decreased from 330 thousand liters in September 1404 to 183 thousand liters in September 1405 and has dropped by 44%.

This statistic shows that the growth of several product groups could not compensate for the heavy drop in motor and process oils. The decrease in production in products such as diesel and gasoline engine oil has been one of the main weaknesses of Shahbarn's performance in Shahrivar.

The total sales of the company decreased from 64 million 559 thousand liters in September 1404 to 43 million 789 thousand liters in September 1405. In this way, the amount of sales of Shahbarn in September 1405 compared to September 1404 has dropped by 32%; A decrease that shows that the weak performance is not limited to the production lines and has also reached the sales of products.

The sale of gasoline engine oil reached from 11 million 701 thousand liters in September 1404 to 6 million 684 thousand liters in September 1405 and decreased by 43%. The sale of diesel engine oil also fell from 12,657,000 liters in September 1404 to 4,317,000 liters in September 1405, a 66% drop.

In the process oils sector, the decrease is more severe. The sale of this product went from 22 million 318 thousand liters in September 1404 to 7 million 371 thousand liters in September 1405 and decreased by 67%.

On the other hand, the sale of industrial oils increased from 5 million 262 thousand liters in September 1404 to 5 million 802 thousand liters in September 1405 and grew by 10%. The sale of base oil also increased from 7 million 270 thousand liters in September 1404 to 9 million 758 thousand liters in September 1405 and increased by 34%.

The sale of other products increased by 134%, from 1 million 981 thousand liters in September 1404 to 4 million 640 thousand liters in September 1405. The sale of paraffin wax also increased from 2 million 836 thousand liters in September 1404 to 4 million 562 thousand liters in September 1405 and has grown by 61%. Antifreeze sold 503,000 liters in September 1405 compared to 420,000 liters in September 1404, an increase of 20%, and the sale of grease increased from 113,000 liters in September 1404 to 151,000 liters in September 1405 and increased by 34%.

In general, the sales growth of some by-products and base oil could not compensate for the heavy drop in motor and process oils. This sales mix accentuates the dependence of revenue growth on rates.

80% growth in revenue despite falling sales volume

Despite the decrease in production and sales, the sales amount of Shahbaran has reached 8 thousand and 91 billion Tomans from 4 thousand 486 billion Tomans in September 1404 to 8 thousand 91 billion Tomans in September 1405. This figure indicates an 80% increase in income in September 1405 compared to September 1404; A growth that seems positive at first glance, but next to the 32% drop in sales volume, its quality is a cause for concern.

The income of gasoline engine oil has increased from 1,565 billion tomans in September 1404 to 2,359 billion tomans in September 1405 and has grown by 51%. However, the sales volume of this product has decreased by 43%. The income of diesel engine oil has also increased from 1,230 billion tomans in September 1404 to 853 billion tomans in September 1405 and has dropped by 31%.

The income of industrial oils has increased from 551 billion tomans in September 1404 to one thousand 713 billion tomans in September 1405 and has grown by 211%. The income of base oil also increased from 392 billion tomans in September 1404 to one thousand 422 billion tomans in September 1405 and increased by 263%.

In the section of other products, the income reached from 113 billion Tomans in September 1404 to 844 billion Tomans in September 1405 and grew by 645%. The income of Paraffin Wax also increased from 96 billion Tomans in September 1404 to 331 billion Tomans in September 1405 and grew by 244%. Antifreeze income has increased from 46 billion Tomans in September 1404 to 126 billion Tomans in September 1405 and has increased by 171%. Grace's income also increased from 21 billion Tomans in September 1404 to 80 billion Tomans in September 1405 and grew by 282%.

On the other hand, the income of processed oils has decreased from 471 billion Tomans in September 1404 to 363 billion Tomans in September 1405 and has dropped by 23%. This decrease shows that the increase in rates in all products could not compensate for the drop in sales volume.

Income growth does not replace production decline

The performance of Naft Behran in September 1405 indicates a serious gap between income and operational activity. The production of the company decreased by 30% and its sales by 32% compared to September 1404, but the income increased by 80%. This divergence shows that the growth of the sales rate was the main factor of the increase in the nominal income and it should not be considered as a sign of the improvement of operational performance.

On the other hand, the drop in production compared to last month and reaching its lowest level after the war increases the concern about the sustainability of the company's activity. Of course, for a more accurate evaluation, it is also necessary to check the statistics of the previous month and the profit margin of the products; But the available data clearly show that the income growth is currently not supported by the increase in production and sales volumes.

Relying on rate hikes to maintain earnings growth could become an unsustainable strategy if Sheburn can't curb the decline in motor and process oil production and improve core product sales. In such a situation, the important criterion for evaluating the coming months will be not only the increase in income, but also the return of the volume of production and sales to higher levels.