KARACHI: Pakistan State Oil’s (PSO) profit soared 49% to Rs10.01 billion in the half-year period ended December 31, 2016 on the back of increased sales volume and value.
The company booked a profit at Rs6.72 billion in the same half of the previous year.
In a notice sent to the Pakistan Stock Exchange, the company reported earnings per share of Rs36.86 in the period under review from Rs24.76 in the corresponding period. Share price of the oil marketing company dropped 2.89% or Rs14.05 and closed at Rs472 with a volume of 1.41 million shares at the Exchange.
Invest and Finance Securities, in a post-result comment, said, “the primary reason for an astounding financial performance is due to hefty inventory gains…the company has booked inventory gains over Rs7 per share [alone] in the second quarter of fiscal year 2017.”
The company did not declare any pay-out “which soured investor sentiments plunging the stock down…we expect the company to cumulatively declare pay-out of Rs17 per share in third quarter (January-March 2017),” it said.
Net sales rose over 16% to Rs411.33 billion in the half (July-December 2016) from Rs353.95 billion in the same half in the previous year.
Other income increased 20% to Rs6.31 billion from Rs5.25 billion. Finance cost declined 21% to Rs2.84 billion from Rs3.60 billion.
In the quarter ended December 31, 2016 alone, the company’s net profit surged 62% to Rs5.63 billion (earning per share at Rs20.75) from Rs3.47 (earning per share at Rs12.78) in the same quarter in the previous year.
Topline Securities added that strong sales and higher other income were the key earnings driver for PSO during second quarter (October-December 2016).
“Sales were mainly led by higher oil volumes and oil prices whereas other income saw sharp increase likely due to penal income – markup on delayed payments to PSO,” the brokerage house said.
Oil sales for the company were mainly driven by petrol sales that were up 32%.
International oil prices during the second quarter were up 19% on year-on-year basis leading to inventory gains for the company during the quarter, the brokerage house said.
Published in The Express Tribune, February 7th, 2017.