KARACHI: Pakistan State Oil’s (PSO) profit increased 13.55% to Rs4.70 billion in the quarter ended March 31, 2018 mainly due to higher sales and income from other than its core business of marketing petroleum products.
In the same quarter (January-March) last year, the company reported a profit of Rs4.14 billion, according to the accounts of the largest oil marketing company available at the Pakistan Stock Exchange (PSX). The earnings per share surged to Rs14.42 in the quarter compared to Rs12.70 in the corresponding quarter last year.
The board of directors has recommended an interim cash dividend of Rs10 per share. The entitlement will be paid to the shareholders whose names will appear in the register of members on June 12, 2018.
The financial result was “in line with market expectations,” Topline Securities’ analyst Umair Nasser said in a post-result comment.
PSO’s share price increased 1.93% or Rs6.22, to close at Rs327.80 with 536,400 shares changing hands at the PSX. Net sales of the company’s petroleum products improved around 4% to Rs226.28 billon compared to Rs218.16 billion.
Net sales of the company improved primarily on account of higher oil prices. “Volumetric sales of the company clocked in at 2.1 million tons in the quarter, down 32% year-on-year basis due to lower furnace oil sales during the quarter,” analyst said.
Other income rose 24% to Rs2.11 billion from Rs1.70 billion due to higher income from late payment surcharge.
On the flip side, the finance costs rose 28% to Rs1.90 billion compared to Rs1.48 billion.
Cumulatively, in the nine-month period (July 2017 to March 2018) duration, the company booked a profit of Rs13.22 billion (earnings per share of Rs40.56), which is 6.6% lower than Rs14.16 billion earned in the corresponding period last year.
PSO said in a separate statement its volumetric sales surged in the nine-month duration. “The company had product wise volumetric growth of 5.4% in High Speed Diesel (HSD), 12.3% in Motor Gasoline (MOGAS), 10.3% in Jet Fuel (JP-1), 21% in Liquefied Petroleum Gas (LPG), 5% in Lubricants and 34% in Liquefied Natural Gas (LNG). The furnace oil volumes however declined by 29%,” it said.
PSO receivables reduce
PSO has managed to get additional funds of Rs23 billion in the month of March, bringing down the outstanding receivables (inclusive of LPS) from the power sector, Pakistan International Airlines (PIA) and Sui Southern Gas Pipeline Limited (SNGPL) as on March 31, 2018 to Rs304 billion versus Rs313 billion as of December 31, 2017.
The management is continuously pursuing with the Ministry of Energy and the Ministry of Finance for their due intervention for injection of funds in order to settle the said outstanding receivables as well as payment for furnace oil and LNG supplies of Rs130 billion planned to be made in the quarter April-June 2018, it said.
“Influx of smuggled products, volatile fuel demand by the power sector and hurdles in induction and smooth movement of National Highway Authority (NHA)/Oil and Gas Regulatory Authority (Ogra) compliant tank lorries by the transport union will be key challenges for the business in comings months,” it said.
Published in The Express Tribune, April 24th, 2018.