KARACHI: Pakistan and Shell’s third quarter profits increase Year-on- Year because of rising power sector demand and the government increasing gasoline and diesel prices.
Fuel prices increased by about 35 per cent this quarter, furnace oil demand rose and oil prices were relatively stable. Pakistan State Oil Ltd’s (PSO) third-quarter net income increased to Rs2.45 billion, a 214 per cent rise, compared to the same period last year. PSO is Pakistan’s biggest fuel retailer and posted its earnings for the first nine months of the fiscal year 2010 on Thursday.
Shell Pakistan Limited’s (SPL) third-quarter profit after tax increased to Rs402 million, a 7.5 percent rise, compared to the same period last year. SPL markets petroleum, compressed natural gas an posted its earnings for the first nine months of the fiscal year 2010 on Thursday. Pakistan raised gasoline prices twice during the quarter after three increases in 2009.
The South Asian nation, which imports about 85 per cent of the oil it uses domestically, reviews domestic fuel prices regularly to reflect movements in the global markets. PSO’s earnings per share rose to Rs14.29 in the three months ended March 31, from Rs4.55 in the same period last year. SPL’s third-quarter earnings per share rose to Rs5.87, up from Rs5.46 in the same period last year. In the third quarter, PSO’s sales increased to Rs213.4 billion from 148.7 billion rupees and SPL’s sales increased to Rs48.5, up from Rs37.5 billion in the same period last year. Last year PSO’s inventory losses had eroded earnings for the company.
Even still, inter-corporate debt remains a major concern for the company, according to JS Global Capital, analyst, Atif Zafar. An increase in sales, higher valuation of fuel stockpiles and payments received as interest on dues resulted in PSO’s profit rising, said Research head of Invest Capital & Securities, Khurram Schehzad.