Pakistan State Oil (PSO), the largest oil marketing company of the country, will not object to the deregulation of oil market and will adopt a professional approach while coming up with its views on the proposal, says Chief Executive Officer Amjad Parvez Janjua.
“At PSO, we have no issue with deregulation and opening of the oil market,” Janjua said at a briefing on the company’s performance at the Islamabad Stock Exchange (ISE) on Thursday.
Financial year 2013-14, which ended in June this year, had been remarkable for PSO as it notched up record high revenues and profit.
Based on a detailed due diligence, he said, the company had developed and implemented a strategy to pursue profitable growth while rationalising its product portfolio.
Accordingly, PSO merged critical aspects of both internal financial review and external market reconnaissance to strike an effective balance between sales volume and profit. Its offers of sales incentives like discounts were limited and focus shifted to robustness of business cases.
“This smart selling approach to achieve the objectives of market leadership and increase in sales volume, while considering the bottom line and liquidity position, enabled the company to achieve profitable growth during the year,” he said.
Giving the highlights of financial results, Janjua said 2013-14 was a momentous year in the company’s operating history when it hit the peak in sales revenue, operating profit, after-tax earnings and market capitalisation.
The after-tax profit surged to Rs21.8 billion compared to Rs12.6 billion in the previous year while market capitalisation crossed Rs100 billion, propelling PSO among the ranks of a few large-cap companies on the country’s stock exchanges. Now, PSO is on the Forbes 2000 list of world’s biggest publicly traded companies.
In sales revenue, the company crossed the Rs1.4-trillion mark and maintained its leading role in the oil market with 73% share in black oil sales and 53% share in white oil.
ISE representatives praised the efforts and performance of the state-owned oil marketing company for achieving all-time high revenues and also asked the government to deregulate the oil business.
They pointed out that the commission charged by dealers and oil marketing companies was low, which made oil business unviable. They have also raised the issue with Petroleum and Natural Resources Minister Shahid Khaqan Abbasi.
PSO Deputy Managing Director Sohail Butt boasted that the company hit all-time high performance benchmarks without any increase in margins during the year.
“Gross profit increased due to marketing performance, smart selling and profitable growth initiatives as well as cost efficiency,” he said, adding marketing, distribution and administrative expenses merely rose 3% against average increase of 14% in the past three years and inflation rate of 8.5% in 2013-14.
In addition to these, the effective mark-up rate was brought down from 11% to 8.5% and against a 50% increase in short-term borrowings, the mark-up cost only rose 26%.
Butt said normal after-tax profit, excluding IPP interest income and other extraordinary items, soared 31% year-on-year as opposed to the previous year when it was negative 7%.
“Consequently, the company made highest-ever contribution to the government exchequer in taxes, duties and levies at Rs289 billion in 2013-14,” he added.
Published in The Express Tribune, September 26th, 2014.
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