In a fast-changing, pandemic, lockdown world, Pakistan State Oil (PSO) has beaten all odds.
PSO announced a record-breaking gross revenue of Rs. 1.4 trillion and the highest ever profit after tax of Rs. 29.1 billion for the financial year 2020-21 (FY21) after a loss after tax of Rs. 6.5 billion in the preceding year.
The net profit translated into a healthy earning per share of Rs. 62.07 vs. loss per share of Rs. 13.77 in FY20.
The company reported net sales of Rs. 1.20 trillion, up by 9.09 period compared to Rs. 1.10 trillion was recorded in the last fiscal year.
The announcement came after PSO’s Board of Management (BoM) reviewed the performance of the company together with its subsidiary Pakistan Refinery Limited (PRL) for the financial year 2020-21, which ended on June 30, 2021, during the meeting held on August 23, 2021, in Islamabad.
Based on the outstanding financial and operational performance of the company, the Board of Management has announced a final dividend of Rs. 10/- per share (100 percent), which is in addition to the interim cash dividend of Rs. 5/- per share (50 percent) for the financial year 2020-21.
The dividend for the financial year stands at Rs. 15/- per share (150 percent). PRL, a subsidiary of PSO, also reported a profit after tax of Rs. 0.94 billion during the year compared to a loss of Rs. 7.6 billion in the previous year. On a consolidated basis, the Group achieved a profit after tax of Rs. 29.6 billion in FY21 compared to a loss after tax of Rs. 14.8 billion in FY20.
The Board noted that these results had demonstrated PSO’s agility and strength across its diverse portfolio despite the challenging economic scenario and recurrent waves of the pandemic.
PSO Leading the Market
PSO is leading the market by a large margin, delivering a phenomenal performance over and above the industry average. The company exhibited an outstanding growth of 21.9 percent in liquid fuels over last year, with volumes reaching 9.2 million tons, attaining a market share of 46.3% in FY21 compared to 44.3 percent in FY20. PSO also achieved its highest ever volume of 7.6 million tons in the white oil segment despite the shrinking jet fuel and kerosene oil industry, with a market share of 45.2 percent in FY21 against 44 percent in FY20, i.e., growth of 120 basis points (bps).
PSO set an all-time high record in Motor Gasoline (MoGas), achieving volumes of 3.5 million tons, an increase of 21.2 percent from FY20, translating into a market share of 41.3 percent compared to 38.7 percent last year – an increase of 260 bps.
The company also made a strong closing in Hi-Cetane Diesel, achieving a volumetric growth of 21.1 percent against industry growth of 17.5 percent, translating into volumes of 3.7 million tons in FY21. The volumes contributed to regaining market share, bringing it to 47.2 percent compared to 45.8 percent in the preceding year, i.e., an increase of 140 bps. PSO attained a volumetric growth of 53.2 percent in black oil with volumes of 1.7 million tons and a market share of 51.7 percent against 46 percent in FY20.
In line with GOP’s clean and green initiative, PSO was the first OMC to upgrade the country’s fuel standard from Euro 2 to Euro 5. The launch of Hi-Octane 97 Euro 5, Premier Euro 5, and Hi-Cetane Diesel Euro 5 proved to be game-changers in the industry, bolstering customer’s confidence in PSO’s products.
Building on its value creation model, the company prioritized high margin products, i.e., High-Octane 97 Euro 5 and lubricants adding significant revenues with a volumetric growth of 177.6 percent and 11.3 percent, respectively compared to last year. PSO’s first EV charging facility – Electro – was also launched in Islamabad.
This performance is also a strong indicator of the change and transformation going on within PSO. With a focus on innovation and technology, PSO continued to enhance its digital capabilities to drive growth and enhance efficiency. The company made significant strides on its journey of digital transformation with the launch of Pakistan’s first digitally integrated oil storage & dispatch terminal in Karachi.
The company fast-tracked infrastructural projects to gain operational efficiency. 174,000 tons of new and rehabilitated storage were added, which significantly increased the number of days cover of petroleum products. Pipeline links have been completed to connect operational locations with White Oil Pipeline to make product movement safer and more efficient. 71 new vision retail outlets were also added to the company’s footprint.
Living up to its promise of keeping the wheels of the nation’s economy in motion and ensuring a seamless supply of fuel, the company imported 4.9 million tons of white oil products, an all-time high since the inception of the company. PSO has also played a pivotal role in the LNG sector.
The company entered into another agreement with Qatar Petroleum under the G2G arrangement to supply an additional 3 million tons of LNG for a period of 10 years. This contract shall add additional volumes to an already executed 15-year long-term sales purchase agreement (SPA), making PSO the largest supplier of LNG in the country with a supply base of 6.75 million tons per annum.
With the burden of circular debt still large, to improve its balance sheet further, PSO recovered Rs. 25.8 billion from the Power Sector along with late payment surcharge income. Reduction in finance cost by Rs. 3.2 billion (24 percent) further complemented the profitability of the company.
At the time of filing this report, PSO’s scrip at the bourse was trading at Rs. 226.40, down by Rs. 4.90 or 2.12 percent, with a turnover of 1.63 million shares on Tuesday.
