PSO in the limelight while PPL set to disappoint

Pakistan State oil and Pakistan Petroleum Limited are expected to announce their earnings for the full fiscal year.

Pakistan State oil (PSO) and Pakistan Petroleum Limited (PPL) are expected to announce their earnings for the full fiscal year of 2010 on Friday.

PSO’s earnings are expected to grow by 63 per cent and a bonus is very likely. However, PPL’s earnings are expected to post a yearly decline of 12 per cent with a dividend of seven to eight rupees.

PSO: Huge earnings with bonus expected

Topline Securities analysts expect PSO to post a profit of Rs11.5 to Rs12 billion, representing earnings per share of Rs67 to Rs70 during the full fiscal year of 2010. This is in contrast to the loss of Rs6.7 billion during the same period last year, which represented loss per share of Rs39.1.

Higher revenue is likely due to higher oil prices and higher sales primarily led by more than 16 per cent rise in furnace oil sales.

With ongoing circular debt liquidity constraints, the possibility of 10 to 15 per cent bonus shares issue cannot be ruled out, according to the analysts. A final cash payout is not expected because interim dividend of Rs3 per share has already been distributed.

The turnaround in earnings is mainly expected due to the absence of inventory losses, which were Rs19 billion last year and the realisation of interest income during fiscal year 2010 on non-payment of dues by power utilities in lieu of circular debt.

PPL earnings decline due to downward revision in wellhead gas prices

JS Global Capital analysts expect that the company will post earnings per share of Rs24.6 against  Rs27.8 in the same period last year, depicting a yearly decline of 12 per cent mainly due to downward revision in wellhead gas prices during the first half of fiscal year 2010.

PPL is expected to announce a final cash dividend in the range of seven to eight rupees per share, full year DPS to Rs11 to Rs12. The analysts added that they expected a 10 per cent bonus issue.

Despite new production flows from Manzalai, Hala, Latif and Gambat, the decline is mainly led by lower wellhead gas prices recorded in fiscal year 2010.

Published in The Express Tribune, August 6^th, 2010.