The turnover tax rate of around 70 per cent during the first quarter of the current financial year is the major factor behind the massive decline in earnings, said IGI Securities analyst Umair Siddique.
The financial charges soared 89 per cent to Rs2.98 billion for the quarter ended September 30, reflecting the overdue payables owed to refineries.
PSO’s outstanding receivables have reached an alarming Rs140 billion which include Rs48.75 billion from disbanded Pakistan Electric Power Company, Rs54 billion from Hub Power Company and Rs23 billion from Kot Addu Power Company, according to news reports.
The corporate debt will continue to constrain PSO’s financial and operational performance in fiscal year 2011, said Siddique.
The company’s sales revenue touched Rs201 billion compared with Rs200 billion in the corresponding period last year, according to a communiqué sent to the Karachi Stock Exchange.
Fuel consumption down
The overall oil consumption dropped by seven per cent because of damage to communication infrastructure and closure of some power plants caused by the recent floods, the company said in a release. Despite these, the company’s market share stood at 68.4 per cent.
However, the situation is likely to improve during the second quarter of fiscal year 2011 as transportation activity increases following rehabilitation and reconstruction work in flood-affected areas.
High speed diesel sales fell due to inaccessibility to 200 retail outlets and a sharp decline in economic activity in flood-hit and adjoining areas.
Furnace oil sales for the company also declined due to temporary closure of some thermal power plants at Kot Addu block, Muzaffargarh, Guddu central and northern blocks and Jamshoro block.
Sales of gasoline hit an all-time high of 276,000 tons in the first quarter.
Published in The Express Tribune, October 22nd, 2010.
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