PSO: EPS of PKR 21.91 in 9MFY23

Pakistan State Oil Company Limited (PSO) announced its financial result for 9MFY23 posting a profit after tax (PAT) of PKR 10.3bn (EPS: PKR 21.91) compared to PKR 64.8bn (EPS: PKR 137.96). On a quarterly basis, the earnings clocked in at PKR 13.6bn (EPS: PKR 29.07) in 3QFY23 against PKR 32.6bn (EPS: PKR 69.40) in 3QFY22 amid lower inventory gains during the quarter. On a sequential basis, the company became profitable again amid i) revision of OMC margins on sale of MS and HSD, and ii) increase ex-refinery margins (resulting in inventory gains in 3QFY23 compared to inventory loss in 2QFY23).

Result Highlights

· Net sales of the company arrived at PKR 2,517bn in 9MFY23, up by 62% YoY given higher average selling prices of petroleum products. Whereas, volumetric sales of MS, HSD, and FO declined by 15%, 19%, and 45% YoY, respectively. Likewise, the topline in 3QFY23 climbed up by 43% YoY due to the aforementioned reason. Meanwhile, the overall volumes plummeted by 28% YoY (MS, HSD, and FO volumes dipped by 11%, 28%, and 87% YoY, respectively).

· The company posted a gross profit of PKR 58.2bn with gross margin compressing to 2.31% in 9MFY23 against 5.98% in SPLY amid inventory losses during the period. During 3QFY23, the gross margin settled at 5.75% (down by 198bps YoY) owing to lower inventory gains during the quarter.

· Other income went down by 48% YoY in 9MFY23 to PKR 11.5bn compared to PKR 22.3bn in 9MFY22. Meanwhile, in 3QFY23, the other income plunged by 65% YoY arriving at PKR 1.9bn given the absence of significant penal income from the power sector booked last year.

· The finance costs surged by 9.4x YoY to PKR 25.1bn in 9MFY23 due to higher interest rates. Similarly, the finance cost swelled up by 10.0x YoY in 3QFY23 owed to the aforementioned reason and surge in short-term borrowings.

· The company booked effective taxation at 49% in 3QFY23 vis-à-vis 30% in 3QFY22.

Courtesy – AHL Research

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