Pakistan State Oil Company Limited (PSO) is scheduled to announce its FY22 financial result on 26th Aug’22, where we expect the company to post a profit after tax of PKR 102,835mn (EPS: PKR 219.04), up by 3.5x YoY. This is attributable to volumetric growth of 29% YoY (FO, HSD, and MS volumes increased by 62%, 26%, and 15% YoY, respectively) and massive inventory gains during FY22 leading to a surge in gross margins by 241bps YoY to 6.94%.

On a quarterly basis, the net profit in 4QFY22 is expected to jump up by 3.5x YoY owed to massive surge in prices of petroleum products tagged with growth in overall sales volumes by 42% YoY (FO, HSD, and MS volumes grew by 167%, 24% and 11% YoY, respectively). Gross margins are expected to settle at 8.77% in 4QFY21 against 4.80% in SPLY given volumetric growth along with hefty inventory gains of ~PKR 60bn during the quarter.

Moreover, the other income is expected to decline by 54% YoY during the quarter given absence of significant late payment interest from power sector which was booked last year. On a QoQ basis, the bottom-line is expected to climb up by 17% given increase in volumes by 36% followed by higher ex-refinery prices of MS and HSD. However, finance cost is expected to climb up by 6.1x QoQ due to higher short term borrowings tagged with higher interest rate. In addition to the result, the company is expected to announce a cash dividend of PKR 30.00/share.

Courtesy – AHL Research