Pakistan State Oil (PSO) is expected to announce its 1QFY24 financial result on 20th October, where we expect the company to post PAT of PkR18.3bn (EPS: PkR39.0), higher by 14.0xYoY compared to LAT of PkR4.63bn (LPS: PkR9.85) in the quarter before. The said QoQ increase is majorly on the back of higher gross margins specifically on regulated products (MS/HSD) alongside significant inventory gains amid rising ex-refinery prices during the period.

The company’s volumetric offtakes remained elevated as well, coming in at 1.91mn tons during the outgoing quarter (up 5%QoQ), as uptick of commercial/industrial activity alongside slight resurgence in RFO based power generation during the period bore its effects. Furthermore, we expect the company to record inventory gains of ~PkR26.0bn (PkR55.5/sh) for 1QFY24, as ex-refinery prices for MS/HSD rose by 3.1%/5.7%QoQ during the period, subsequently resulting in gross margins for the quarter to end at 5.1% (vs. 1.9% 4QFY23).

On the RLNG front, PSO’s average DES price for the quarter stood at US$9.61/mmbtu, while offtakes stood at 856MMCFD (up 3%/16% QoQ/YoY), resulting in topline from the RLNG segment amounting to PkR257bn.

Finally, we expect effective tax to clock in at ~40% for the period (vs 4QFY23: -86% ET), significantly lower compared to the previous quarter amidst absence of retrospective super tax.

Courtesy – AKD Research