PSO Reports 50% Drop in Profits Despite Regaining Market Share

Pakistan State Oil (PSO), the leading oil marketing company of Pakistan announced its financial results for the nine months of fiscal year 2019-20 that concluded on March 31st, 2020.

PSO’s Profit After Tax (PAT) during the nine months amounted to Rs. 3 billion, dropping by almost 50% as compared with a profit of Rs. 5.92 billion in the same period last year. However during the third quarter, the company reported a loss of Rs. 3.42 billion. It had booked a profit a Rs. 1.67 billion in the same quarter last year.

According to a company’s statement, a significant drop in International Oil prices in March 2020 (Dated Brent from $52/bbl to $18/bbl from March 2 to March 31, 2020) was seen and its related impact on net realizable value of inventory in hand by PSO.

The sales of the company during the nine months were reported at Rs. 887.33 billion, up by 8.30% as compared with the Rs. 819 billion recorded in the same period last year.

In addition, reduced consumption of petroleum products due to the country-wide lock down, increase in Finance Cost due to higher receivables owing to defaults in payments by SNGPL and higher interest rates and continued economic slowdown impacted the Company’s profitability, said the company. The finance cost was increased by 55.10% to Rs. 10.50 billion as compared to Rs. 6.77 billion recorded in the corresponding period of the last year.

Liquidity remained a key concern for the company and will pose formidable challenge in the future as well, especially in wake of COVID 19 and related economic challenges impeding growth. PSO’s receivables from power sector declined by Rs. 15.6 Billion while on the other hand receivables from SNGPL increased by Rs. 32.4 Billion.

Earnings per share during the nine months went down from Rs. 12.62 to Rs. 6.41 in the current fiscal year.

PSO Regains Market Share

PSO’s market share increased by 2.4 % in MOGAS and 5.8 % in HSD. The overall market share of White Oil increased by 3.8% during 9MFY20 as compared to the same period last year.

“Despite serious challenges faced by the economic and business world amid COVID-19 outbreak, PSO’s bottom line remained positive. The Profitable performance was achieved by it through re-gaining its market share over same period last year (SPLY) and by maintaining growth over and above the industry,” said the company in a statement.

Increase in shareholding in Pakistan Refinery Limited

During the period PSO increased its shareholding in Pakistan Refinery Limited (PRL) from 52.68% to 60% by acquiring 34.1 Million additional shares. During 9MFY20 PRL incurred a loss after tax of Rs. 6.8 Billion (9MFY19: Rs 3.5 Billion) as a result of inventory losses due to international crude oil dynamics, depressed refining margins and higher finance cost.

On a consolidated basis, the group incurred a net loss of Rs. 4.4 Billion for the period ended July to March 20.

Supply Chain

PSO with a purpose to manage the sensitive supply chain of country procured around 40% of local refinery production while 49% of industry imports were also managed by the company.

“PSO being a dynamic company is focusing on automation of its operations at depots/ installations and retail outlets. Furthermore, 26 New Vision Retail Outlets were added in company’s retail network and 700 OGRA standard compliant Tank Lorries were inducted in the company’s fleet during the period. The company also added 17 new Shop Stops to its network, “said a released statement by the company.

CSR

PSO CSR Trust stood firm in the face of the calamity. To initiate several projects such as food drive and health care programs Rs. 71 Million was contributed by the Trust to various organizations including Rs. 50 Million to the Prime Minister’s COVID 19 Relief Fund.



>