Pakistan State Oil registers after tax profits of Rs 2.5 billion in Q1 FY12

KARACHI: Pakistan State Oil (PSO) sales revenues grew tremendously to Rs 279 billion with growth of 38 percent in the first quarter of fiscal year 201-12, despite tough financial situation and mounting non-payments dues of commercial customers.

It was announced in the meeting of board of management of PSO convened on Monday at PSO House to review the company’s performance over the first quarter period from July 2011 to September 2011. The nation’s leading energy provider also announced an increase in after tax profit to Rs 2.5 billion vs. Rs 0.8 billion in Q1FY11. The increase in earnings was mainly due to a reduction in finance cost and improvements in margins as compared to last year.

During the period under review, PSO’s white oil sales grew to 1.3 million metric tonnes (MTs) in comparison to 1.2 million MTs during the same period last year. This was due to the increase in motor gasoline demand caused by an increase in motor vehicles sales, CNG load shedding, increased usage of generators due to frequent power outages and a significant price gap between motor gasoline and HSD.

On the other hand, black oil sales remained steady at 1.8 million MTs. Overall PSO’s market share in the black oil and white oil segments stood at 77.1 percent and 52.5 percent, respectively, thereby contributing to an overall market share of 64.4 percent. During the period under review PSO successfully launched the first ever Generator Oil designed for the Pakistani market. The company is also enhancing its storage capacity through the construction of a new 26,000 KL storage depot near Faisalabad. PSO has also been making efforts for people from the rain-affected areas through the dispatch of relief goods and medicines as well as establishing free medical camps in the affected areas.

The Board Members showed concern over the ever-rising circular debt remains, which stood at Rs 153.5 billion as of September 30, 2011. PSO’s management is making all possible efforts to reduce the impact of the financial costs through efficient management of funds. Furthermore, PSO continues the constant pursuit for recovery of outstanding receivables from the IPPs as well as the government of Pakistan.

The growth in earnings is primarily on account of recognition of 1 percent turnover tax last year, which was later retrospectively reverted back to 0.5 percent. After adjusting for turnover tax, the profits have increased by 52 percent YoY.

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