With lower finance cost, PSO’s profit surges 77% in FY17

Company declares Rs15 per share cash dividend, stock price hits upper limit

Our Correspondent August 09, 2017

KARACHI: Pakistan State Oil’s (PSO) profit surged 77% to Rs18.22 billion in the fiscal year ended June 30, 2017 on the back of a strong growth in sales and a significant drop in finance cost, according to a bourse filing on Tuesday.

The state-owned oil marketing firm, which remains market leader, had recorded a profit of Rs10.27 billion in the previous fiscal year.

PSO to transport oil via Pakistan Railways

Earnings per share of the company improved to Rs67.08 in FY17 from Rs37.81 in the previous year. The board of management recommended a final cash dividend of Rs15 per share in addition to the interim dividend, already paid, of Rs10 per share for the year.

The board also recommended issuing bonus shares in the proportion of one share for every five shares held by the shareholders. PSO is a listed company at the Pakistan Stock Exchange (PSX). Its share price hit the 5% upper limit and increased Rs21.62 to close the day at Rs454.06 with a volume of 1.54 million shares.

“The winning momentum came from a 30% increase in top line (net sales) to Rs878.14 billion and improvement of 91 basis points in gross margins,” the company said in a press statement.

A strong support to the profit came from financing costs, which dropped 17% to Rs5.92 billion from Rs7.14 billion last year. In FY17, the company registered a healthy volumetric growth across its product portfolio.

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“Furnace oil, jet fuel and motor gasoline volumes were up 11%, 19% and 9% respectively,” said the statement.

“A focused strategy resulted in 106% volume growth in liquid petroleum gas (LPG) business and the lubricants business repositioned itself in the market by gaining 28% volumes over last year.”

During the year, PSO imported 186.6 million British thermal units of liquefied natural gas (LNG) through 58 vessels and supplied 400 million cubic feet of re-gasified LNG per day from July 2016 to January 2017, which subsequently increased to 600 mmcfd from February 2017.

The company continued to lead the liquid fuel market with an overall share of 54.8% despite external challenges. These included delay in resolution and settlement of inland freight equalisation margin (IFEM) matters pending since 2008 with the regulator (Ogra), storage and port constraints and last week’s sales cap primarily on PSO.

Outstanding receivables of PSO have gone up to Rs277.1 billion from the power sector compared to Rs232.2 billion on June 30, 2016.

Published in The Express Tribune, August 9th, 2017.

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