Pakistan State Oil Company Limited (PSO) announced the financial results for 1QFY25. The company posted a net profit of PKR 3,971mn (EPS: PKR 8.46) compared to PKR 21,888mn (EPS: PKR 46.62) in 1QFY24, down 82% YoY. However, the bottom line surged by 61% on a QoQ basis.

Result Highlights       

• Net sales during 1QFY25 contracted by 14% YoY, settling at PKR 787,589mn, which comes on the back of i) lower average retail price of petroleum products, and ii) 15% YoY reduction in the sales volume of petroleum products (MS, HSD, and FO dispatches down 15%, 19%, and 22% YoY, respectively). Although we await disclosure of detailed accounts, we estimate the revenue contribution from RLNG segment to be PKR 302bn (up 18% YoY) given higher DES price (up by 4% YoY) coupled with handling of 30 cargos in 1QFY25 versus 26 cargos in SPLY. On a sequential basis, the topline tumbled by 13% QoQ owing to 13% QoQ decline in overall petroleum sales volumes.
• Gross margins of the company arrived at 3.3% in 1QFY25 compared to 6.4% in 1QFY24 on account of inventory losses during the quarter compared to hefty inventory gains during SPLY. On a QoQ basis, the gross margins in 1QFY25 increased by 134bps amid lower inventory losses incurred during the quarter.  
• Finance cost increased by 1% YoY to PKR 10,424mn in 1QFY25 due to higher late payment surcharge during the period.
• The company recorded effective taxation at 66% in 1QFY25 vis-à-vis 49% in 1QFY24

Courtesy – AHL Research