PSO prof­its up 57pc in 1HFY16

The Pak Banker - - COMPANIES/BOSS - Staff Re­port

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.

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