Pakistan’s oil market leader and dominant state-owned company – Pakistan State Oil (PSO) – has joined the prestigious club of world’s biggest publicly traded companies on the Forbes 2000 list in the wake of initiatives undertaken by the present management.
Forbes has screened the company in four categories – sales, profits, assets and market value with a minimum cut-off value – paving the way for it to qualify for inclusion in the list.
In financial year 2013-14, according to a PSO official, the company improved its refining base with an increase in equity stake in Pakistan Refinery Limited from 18% to 22.5%. It also completed groundwork for diversifying into liquefied natural gas (LNG) import business by developing the structure of the LNG project in consultation with all stakeholders.
The company notched up all-time high sales revenue and crossed the Rs100-billion mark in market capitalisation, becoming one of the few Rs100 billion-plus large-cap companies on the Karachi Stock Exchange.
Pakistan Credit Rating Agency (Pacra) upgraded PSO’s outlook from ‘stable’ to ‘positive’ with AA+ and A1+ long-term and short-term ratings respectively.
The official said PSO, being one of the largest taxpayers in the country, made the highest-ever contribution of Rs289 billion to national coffers in duties and taxes in the year 2013-14, higher by 10% than the previous year.
In comparison with the US Fortune 500 companies, PSO being the largest Pakistani company in terms of turnover would rank around 211.
The official pointed out that the high performance benchmarks were achieved without any rise in margins during the year and despite an escalating financing cost because of higher receivables from power plants.
“The company optimised sales of its products to strike an effective balance between growth and profitability while realising substantial cost efficiency,” Managing Director Amjad Parvez Janjua commented.
A member of PSO board linked the company entering Forbes 2000 to efficiency in administration, distribution and marketing, restricted increase in expenses to 3% compared to average rise of 14% over the last three years and inflation rate of 8.5% in 2013-14.
“The board unanimously resolved on Wednesday to place on record its commendation for the management, particularly Amjad Parvez Janjua, the MD, for achieving outstanding yearly results,” he added.
During the period under review, the company met the challenge of timely and continuous supply of fuel oil for electricity production despite the damaging impact of circular debt as receivables grew sharply from the power sector. It achieved this by efficiently managing the supply chain, inventory and finances.
It introduced various system-based controls and automated a number of business functions during the year.
An online order management system was implemented, enabling PSO’s customers to login to the e-portals and place orders for products, make payments and view the accounts status. It helped reduce operational cost, enhance controls, eliminate potential irregularities due to human intervention and improve payment collection by establishing online connectivity with the banking network across the country.
During the year, a human resource development initiative for building capacity and developing leadership was also launched and an internship programme for students of universities across Balochistan was started.
Being aware of its corporate social responsibility and to support relief activities, PSO contributed Rs40 million to the Prime Minister’s Relief Fund for Internally Displaced Persons from North Waziristan in addition to donating part of its employees’ salaries for the IDPs.
Published in The Express Tribune, September 5th, 2014.