- As per details, PSO short term borrowings reduced from Rs 121.678 billion in FY19 to Rs 79.032 billion in FY20, signifying a debt decline of an impressive 35 percent.
Despite declaring a loss after tax of Rs 6.465 billion for the year ended June 30, 2020, Pakistan State Oil (PSO) may have found a silver lining as the company has managed to retire Rs 42 billion debt in the company’s short-term borrowings.
As per details, PSO short term borrowings reduced from Rs 121.678 billion in FY19 to Rs 79.032 billion in FY20, signifying a debt decline of an impressive 35 percent.
As per a report from Foundation Securities, the decline in short-term debt is likely to have a strong positive impact on the earnings for the next quarter. It will not only aid the company in further borrowings, but would prove vital in its ongoing negotiation with the Power Sector regarding the circular debt issue.
The report has estimated an annualized impact of Rs 3 per share in the earnings for 1QFY21, after taking into account Rs 28 billion on foreign exchange gains received from government, Rs 26 billion reductions in trade debt mainly from Rs. 19 billion received from SNGPL.
It is pertinent to inform, PSO on September 1st announced its Financial Results FY2020 reporting Loss After Taxation of Rs. 6.5 billion translating into a loss per share of Rs13.8 in its consolidated financial statement filed with the bourse.
“Despite the challenging economic scenario, PSO continued to lead Pakistan's petroleum downstream market having a share of 44.3 percent in total liquid fuels at the end of FY20, which was 1.9 percent more than the prior year,” the company said in a statement.