It is definitely celebration time for the largest OMC in the country. Pakistan State Oils financials for 9MFY12 reveal a surprising yet pleasing performance by the OMC amid choppy times.
The company was able to bag sales worth Rs737 billion for 9MFY12, inclining due to a strong growth in oil prices and petroleum products. The 32 percent rise in net revenues corresponds to the heightened prices of HSD and furnace oil and higher offtake of motor spirit during the relevant period.
PSO beat the streets as it surpassed the earnings expectations. Net earnings clocked in at Rs8.97 billion versus Rs9.26 billion during the same period last year. FY12 which started off as a year of gloom for PSO witnessed a refreshing third quarter that awed the market.
With profitability withering by only three percent for 9MFY12 vis-à-vis 9MFY11, 3QFY12 experienced a growth in EPS of more than double. The 106 percent growth in the net earnings for 3QFY12 compared to the same period last came in from higher other income in shape of penalty recoveries and increase in interest income from power generation companies.
The finance cost of the company continued the downward trend during 9MFY12 falling by three percent versus 9MFY11 as PSO has been moving its local purchases to foreign suppliers. Moreover, the positive picture is also painted due to inventory gains and some respite in exchange losses brought by some stability in rupee depreciation.
Another good news for the stakeholders came with the announcement of first interim cash dividend of rupees three per share.
However all hopes and optimism for the largest OMC keep getting dented the burgeoning circular debt. Where on one side its receivables including the power sector have mounted as high as Rs197 billion, its payables to refineries and international traders on the other hand, have also swelled up to Rs177 billion.
PSOs receivables have been piling up, and the supply of the expensive furnace oil by the company to the power sector will come under colossal threat if its dues are not paid.
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Pakistan State Oil
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mn Rs 9MFY12 9MFY11 YoY 3QFY12 3QFY11 YoY
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Net sales 737,392 558,377 32% 244,516 198,423 23%
Gross profit 25,600 21,698 18% 9,183 7,754 18%
Operating expenses 11,703 6,102 92% 3,889 1,925 102%
Other income 7,402 2,536 192% 6,141 740 729%
Operating profits 21,885 18,490 18% 11,442 6,658 72%
Finance cost 8,839 9,099 -3% 4,838 3,055 58%
Profit before tax 13,426 9,802 37% 6,730 3,750 79%
Taxation 4,452 544 719% 2,339 1,623 44%
Profit after tax 8,974 9,258 -3% 4,391 2,127 106%
EPS 52.32 53.98 -3% 25.60 12.40 106%
Gross margin 3.5% 3.9% 3.8% 3.9%
Operating margin 3.0% 3.3% 4.7% 3.4%
Net margin 1.2% 1.7% 1.8% 1.1%
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Source: KSE notice
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