Daily The Business

PSO reports profit after tax of Rs. 4.2 billion in 1H FY19

Our Special Correspondent

Lahore: The Board of Management (BOM) of Pakistan State Oil Company
Limited (PSOCL) has reviewed the performance of the Company for first
half of the financial year 2019 (1HFY19) in its meeting held on
February 16, 2019.

The challenging economic trend in the country fueled by rupee
devaluation and adverse balance of payment position resulted in
negative growth of 27% in the cumulative liquid fuel market with
negative contribution of white oil and black oil of 12% and 60%
respectively. Black oil volumes have been impacted significantly due
to power production shift towards RLNG in the country, based on a GoP
decision.

Despite the challenging economic scenario, PSO lead the liquid fuel
market in 1HFY19 with an overall market share of 40.9% (increase of
0.7% market share vs. Sept 18 quarter). In spite of soaring
outstanding receivables (inclusive of LPS) from the Power Sector, PIA
and SNGPL as of December 31, 2018 which stood at Rs. 325 billion
(September 30, 2018: Rs. 310 billion), PSO maintained the sensitive
supply chain by importing 48% of total industry imports and up lifting
36% of total refinery production in the country.

The economic down trend and reduction in overall market size has
impacted the Company’s profitability. During the period under review,
the Company reported Profit after Tax (PAT) of Rs. 4.2 billion. Major
reasons for reduction in PAT as compared to same period last year are
lower gross profit mainly due to dip in sales volume of black and
white oil, higher inventory loss due to reduction in international Oil
prices, increase in finance cost due to sharp hike in discount rate by
SBP and higher average borrowing levels vs. same period last year,
lower interest income from power sector and foreign exchange loss on
account of PKR devaluation.

Despite stiff competition in the industry especially due to an
increase in the number of OMC’s and a shrinking market size, PSO is
making an all-out effort to maintain its market share and leadership
position with sustained profitability. The management expressed
sincere gratitude to all stakeholders including Government of
Pakistan, especially Petroleum division of Ministry of Energy and
shareholders of the company for their continued support and guidance.

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