PSO records Rs20.3 billion profit in second quarter of FY22

PSO records Rs20.3 billion profit in second quarter of FY22

PSO records Rs20.3 billion profit in second quarter of FY22
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KARACHI: The profits of Pakistan State Oil (PSO) registered the earnings growth of 4.6x to Rs20.3 billion, translating into the earnings per share of Rs43.27 during the second quarter of the fiscal year 2022 ended in December 2021.

The company’s profits were recorded at Rs4.03 billion translating into the earnings per share (EPS) of Rs8.85 during the same period last year.

“The jump in the profitability can be credited to higher than anticipated inventory gains, improved volumetric sales, and a jump in other income,” Yousaf Rehman at KASB Securities noted in a report.

“The stock price, however, is down around 3.3 per cent since the result announcement because of a notable absence of any payouts,” he added.

The company did not declare any payout along with the results.

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The PSO’s revenues increased 78.8 per cent during the second quarter of FY22, as against Rs295.87 during the previous year because of higher volumetric sales and a sharp increase in domestic petroleum products prices.

“Domestic petroleum prices are hovering at record-high levels because of the sharp increase in the global oil prices and rupee depreciation. Moreover, volumetric sales are also on the rise because of the government’s focus on economic growth,” Rahman said.

The company’s gross profits surged 3x to Rs27.7 billion during the period under review due to notable inventory gains following a surge in the domestic petroleum prices.

Moreover, the higher prices of both regasified liquefied natural gas (RLNG) and Furnace Oil (FO) are also expected to have improved the gross margin contribution of the two commodities.

The other income of the company increased 2.8x to Rs8.9 billion during the second quarter of FY22 likely on the account of higher receipts of late-payment interests.

“We believe the energy chain has benefitted from the clearance of its overdue receivables post the payment to the independent power producers (IPPs), allowing companies to clear their overdue balance from PSO,” Rahman said.

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“In spite of record profitability, we believe PSO withheld any cash payouts because of stuck cash within its supply chain, likely within the RLNG space. Moreover, the sharp rise in the global oil prices is also expected to have increased the company’s working capital requirements”.

For the half year ended December 31, 2021, PSO announced a net profit of Rs31.92 billion translating into the EPS of Rs68.2, compared with the profit of Rs9.25 billion translating into the EPS of Rs19.93 during the corresponding period last year.

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