PSO Half Yearly Revenue Increases by 19%, Profits Down by 4.9%

Pakistan State Oil (PSO) has announced its results for the half year’s end. Profits are down 4.89% to Rs 8.52 billion in the half-year period that on ended December 31, 2017 as compared to a profit of Rs 10.01 billion in the corresponding period from last year.

The company reported earnings per share of Rs 26.14 in the period under review, down from Rs 30.72 in the corresponding period.

Surprisingly, no cash dividend or bonus shares were announced by the company.

PSO’s net sales for the half year rose to Rs 518 billion, up by 26.03% (July-December 2017).The outstanding receivables challenge (inclusive of LPS) as of December 31, 2017 stood at Rs 313 billion (June 30, 2016:Rs 277 billion) against supplies to IPPs, GENCOs, PIA and SNGPL, resulting in a surge in borrowings to Rs 119 billion.

The Management is continuously pursuing the matter of early realization of outstanding dues and injection of funds with the Ministry of FInance as well as Ministry of Energy. PSO received Rs 88.9 billion vs Furnace Oil supplies of Rs 115.6 billion during H1 FY18.


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The Gross Profit of the Company increased by 5% to Rs 18.7 billion during 1HFY18 vs SPLY (volumetric increase of 8% despite reduction in Furnace Oil volumes). The Government of Pakistan had issued PIBs of Rs 46 billion to PSO in June 2013 as part of partial circular debt settlement. Maturity of these PIBs in July 2017 is the key driver for lower interest income (Rs 2.1 billion) and Profit after Tax (PAT) of Rs 8.5 billion in 1HFY18 vs Rs 10 billion during SPLY.

PSO imported 69% of the energy industry imports while local Refinery upliftment improved to 39% (9% increase over SPLY). The first tank lorry to comply with OGRA & NHA standards was also introduced.

The Company has approached the relevant authorities on the matter of ban on development of outlets, inconsistent exchange rate for pricing of imported POL products, fuel adulteration, last day volume sales capping, delay in settlement of IFEM receivables since 2009, dumping at PSO’s Retail outlets, increasing product volumes from across the border and reduced product supply committed in Product Review Meetings by other OMCs during expected price increase.

During 1HFY18, the market share of White Oil stood at 45.7% while market share of Black Oil dropped to 73% from 73.4% over Same Period Last Year (SPLY) and PSO’s overall market share in liquid fuel market was 55% (1HFY17: 56%).


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The Company continued to deliver healthy volumes in all the businesses except Furnace Oil that declined due to shift of Power Plants to LNG starting November 2017. This shift is expected to be a positive game changer for the country’s energy mix.

Pakistan State Oil’s (PSO) profit for 2QFY18 stood at Rs3.5 billion which is down by 38% YoY as compared to Rs5.36 billion, amid sharp drop in other income during the quarter.

The earning per share in the quarter was down to Rs 10.71 as compared to Rs17.30 in the corresponding year.

At the end of the day, PSO’s share at the exchange closed at Rs 298.73, down by Rs-6.64 from its previous closing.

Revenues of the company improved by 19% to Rs 260 billion on account of higher international Arab light oil prices (up 27% YoY in 2QFY18) and higher OMC margins on white oil (petrol + diesel).

The major drag on the earnings was lower other income which dropped to Rs756 million in 2QFY18 from Rs4.4 billion in 2QFY17. This is primarily due to absence of any receipt of penal income (delayed payment charge) during the quarter.


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PSO is also facing challenges that are hindering its growth due to the expectation that the Company will keep the country’s energy supply chain running when other OMCs reduce product availability.

PSO is also the first OMC in Pakistan to launch a complete solution for card and account management via its online console “Fuelink”. The Company was also honored by the Project Management Institute, USA by winning the 1st runner-up award for its project “Cards end to end system development and migration”.

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