PSO’s annual profit up 77pc to Rs18.225bln

KARACHI: Net income of Pakistan State Oil (PSO) climbed 77 percent to Rs18.225 billion for the year ended June 30, 2017, translating into earnings per share (EPS) of Rs67.08, analysts said on Tuesday. 

PSO’s profit was recorded at Rs10.273 billion with EPS of Rs37.81. The country’s largest oil marketing company (OMC) also announced a final cash dividend of Rs15/share, which is in addition to the dividend of Rs10/share already paid to the shareholders. The company also announced 20 percent bonus shares – one share for every five shares held.

Analyst Faizan Ahmed at JS Global Capital said the earnings came in line with the expectations.  “However, cash dividend of 150 percent and 20 percent bonus shares surprised market and indicated improving liquidity position of the company,” Ahmed added. “Apart from increase in volumes, inventory gains also helped propel company’s earnings during the year.”

In July, PSO received approximately Rs44 billion against the maturity of Pakistan investment bonds it subscribed to settle its receivables against power generation companies. PSO reported net sales of Rs878.146 billion for the fiscal year of 2016/17, up 29.5 percent over the previous year.   

On Tuesday, the company’s share value hit the upper price circuit. Analyst Umair Naseer at Topline Securities attributed profitability growth to upward revision in OMC’s margin on retail fuel products, absence of any major inventory losses as was the case last year and monetary easing and “hence lower financial charges.”    

In FY2017, PSO depicted a healthy volumetric growth across its products’ portfolio. Furnace oil, jet fuel and motor gasoline volumes were up 11 percent, 19 percent and nine percent, respectively.  PSO imported 67 percent of industry volume while also improving refinery uplift by 7.3 percent to 37.8 percent.

The company imported 186.672 million British thermal unit of liquefied natural gas (LNG) through 58 vessels and supplied 400 million metric cubic feet per day (mmcfd) of re-gasified LNG from July 2016 to January 2017, which subsequently increased to 600 mmcfd from February 2017. It has outstanding receivables of Rs277.1 billion, which constrains its liquidity.