Corporate results: PSO’s earnings drop 73% in first half

KARACHI:

Pakistan State Oil (PSO), Pakistan’s largest oil marketing company with market capitalisation of $1 billion, posted a profit of Rs4.28 billion in the half year ended December 2014, down about 73% from Rs15.80 billion in the same period of previous year. Earnings per share in the first half (July-December 2014) stood at Rs15.76, down from Rs58.15 in 1HFY14.

“The result was below our expectations due to higher inventory loss booked by the company,” commented Topline Securities in a research note.

Net sales of the company dropped 17% to Rs508 billion in 1HFY15 compared to Rs612 billion in 1HFY14.

According to Topline, the decline in net sales was due to 16% and 11% fall in furnace oil and high-speed diesel volumes respectively coupled with falling petroleum product prices during the period under review.

The sharp decline in PSO’s earnings was primarily due to the decrease in gross margins to 2.46% in 1HFY15 from 3.77% in the corresponding period of previous year, it said.

Published in The Express Tribune, March  3^rd,  2015.

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