Pakistan State Oil Company profitability arrived at PKR 46.62/share in 1QFY24

Pakistan State Oil Company Limited (PSO) announced its financial result for 1QFY24 whereby the company posted a profit after tax (PAT) of PKR 21.9bn (EPS: PKR 46.62) compared to profit of PKR 1.2bn (EPS: PKR 2.55) in 1QFY23 and a loss of PKR 4.6bn (LPS: PKR 9.85) in 4QFY23.

Result Highlights

Net revenue settled at PKR 920bn in 1QFY24, up by 7% YoY. The growth in sales comes on the back of i) a higher average retail price of petroleum products, and ii) a jump in MS and HSD volumes by 7% and 8% YoY due to low base impact from last year. Meanwhile, FO volumes dwindled by 87% YoY. On sequential basis, the topline witnessed an increase of 5% QoQ, on account of jump in overall sales volumes (MS and FO offtake up by 8% and 3x QoQ, respectively).

The company posted a gross profit of PKR 58bn with gross margins set at 6.35% in 1QFY24 compared to gross profit of PKR 7bn (0.78% gross margins) in the prior year. The improvement in gross margins is attributable to massive inventory gains of ~PKR 36bn during the period under review. Similarly, gross margins on a QoQ basis augmented by 445bps due to aforementioned reason.

Other income reduced by 48% YoY to PKR 3.3bn in 1QFY24 owed to lower interest received on delayed payments. Meanwhile, the other income ascended by 71% QoQ on account of higher markup received on delayed payments.

Meanwhile, finance costs escalated by 2x YoY to PKR 10bn given higher short term borrowings. On QoQ basis, the finance costs dropped by 32% QoQ.

The company booked effective taxation at 49% in 1QFY24 vis-à-vis 70% in 1QFY23.

Courtesy – AHL Research

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