· Pakistan State Oil (PSO) is expected to announce its 2QFY23 financial result sometime in January, where we expect the company to post PAT of PkR2.4bn (EPS: PkR5.1)

· The said increase is majorly on the back of increased HSD offtakes (up 53%QoQ), owed to the sowing demand in the rabi season during Oct/Nov’22.

· Furthermore, we expect the company to record inventory losses of ~PkR12.2bn (PkR26/sh) for 2QFY23, as ex-refinery prices for MS/HSD fell by 18%/11% during the period as compared to the previous quarter, subsequently resulting in gross margins for the quarter to end at 0.7% (vs. 0.2% 1QFY23)

· Finally, we expect the topline from LNG segment to clock in at PkR232bn, changing by –2.5%/73% QoQ/YoY, majorly on the back of rising LNG prices globally (energy crunch in Europe/Asia) coupled with increased volumes (new LNG deal with Qatar @ 10.2% slope, signed last year)

· Our Dec’23 TP of PkR215/sh provides a total return of 53%, with forward dividend yields of 7/10% for FY23/24, respectively

Courtesy- AKD Research