PSO profits up 57pc in 1HFY16
Pakistan State Oil (PSO) profitability for first half of 2015-16 witnessed marked improvement surging by 57% to Rs 6.7 billion as compared to Rs 4.3 billion during same period of last financial year.
During the period under review i.e. 1HFY16; PSO's market share stood at 55.5% with 46.9% share in White Oil (Mogas, HSD, SKO, JP-1) and 69.6% share in Black Oil (FO, LDO). The Company's sale volume of Motor Gasoline grew by 26% over Same Period Last Year (SPLY) mainly due to decrease in price of gasoline and subsequent increase in customer demand. Additionally, HSD sales recorded an increase of 0.7% over SPLY while 5.7% growth was witnessed in JP-1 on account of increased upliftment by PIA and international airlines. FO volumes declined by 4.3% due to lower upliftment by IPP's primarily due to shifting from FO to natural gas.
This increase in revenue was mainly due to growth in sales volume and margins of white oil products and decreased inventory losses. A significant drop in operating and finance costs by 18% and 39% respectively also contributed to enhancement in the Company's profitability. However, decrease in black oil margins owing to reduction of 48% in the OPEC price of crude oil per barrel had an adverse impact on profitability of the Company.
During the subject period, the cash flows and liquidity position of the Company improved, though they remain critical as a consequence of outstanding receivables of Rs 219 billion (June 30, 2015: Rs 230 billion) from the power sector, PIA and SNGPL against supplies of Furnace Oil, Aviation Fuels and Liquefied Natural Gas (LNG) respectively. The Board directed the Management to continue working closely with the concerned government departments and customers for timely realization of due payments against fuel supplies.
Keeping into account the performance of the Company, the Board declared an interim cash dividend of Rs 5 per share as compared to Nil dividend in the same period last year.
Pakistan and Qatar inked a historic agreement for the provision of Liquefied Natural Gas (LNG) to meet the growing energy needs of Pakistan. Being the designated entity by Government of Pakistan for procuring LNG to meet the gas deficit of the country, Pakistan State Oil entered into Long term LNG Sale Purchase Agreement (SPA) with Qatar Liquefied Gas Company Limited2 (QG2). Under this agreement the Company will be acting as the sole LNG buyer for Pakistan keeping in view the company's international credibility and expertise in the energy supply chain.
The Board appreciated the contributions of the Company workforce and expressed gratitude to the shareholders, customers, business partners and other stakeholders for their trust in the Company. The Board extended gratitude to the Government of Pakistan, particularly the Ministry of Petroleum and Natural Resources for its continued support which enabled the Company to achieve its business and performance objectives.