PSO regains market share, earns Profit after Tax of Rs.3 billion

F.P. Report

KARACHI: Pakistan State Oil (PSO), the leading oil marketing company of Pakistan, convened its Board of Management (BoM) meeting to review the company’s performance during the nine months of fiscal year 2019-20 that concluded on March 31st, 2020.

Despite serious challenges faced by the economic and business world amid COVID-19 outbreak, PSO’s bottom line remained positive. The Profitable performance was achieved by it through re-gaining its market share over same period last year (SPLY) and by maintaining growth over and above the industry. PSO’s market share increased by 2.4 % in MOGAS and 5.8 % in HSD. The overall market share of White Oil increased by 3.8% during 9 M FY20 as compared to the same period last year. PSO CSR Trust stood firm in the face of the calamity. To initiate several projects such as food drive and health care programs Rs. 71 Million was contributed by the Trust to various organizations including Rs. 50 Million to the Prime Minister’s COVID 19 Relief Fund.

PSO’s Profit After Tax (PAT) during the period ended March 31, 2020 amounted to Rs _3__ Billion (9MFY19: Rs 5.9 bn). A significant drop in International Oil prices in March 2020 (Dated Brent from $52/bbl to $18/bbl from March 2 to March 31, 2020) and its related impact on net realizable value of inventory in hand by PSO. In addition, reduced consumption of petroleum products due to the country-wide lock down, increase in Finance Cost due to higher receivables owing to defaults in payments by SNGPL and higher interest rates and continued economic slowdown impacted the Company’s profitability.

During the period PSO increased its shareholding in Pakistan Refinery Limited (PRL) from 52.68% to 60% by acquiring 34.1 Million additional shares. During 9MFY20 PRL incurred a loss after tax of Rs 6.8 Billion (9MFY19: Rs 3.5 Billion) as a result of inventory losses due to international crude oil dynamics, depressed refining margins and higher finance cost. On a consolidated basis, the group incurred a net loss of Rs 4.4 Billion for the period ended July to March 20.

PSO with a purpose to manage the sensitive supply chain of country procured around 40% of local refinery production while 49% of industry imports were also managed by the company. PSO being a dynamic company is focusing on automation of its operations at depots/ installations and retail outlets. Furthermore, 26 New Vision Retail Outlets were added in company’s retail network and 700 OGRA standard compliant Tank Lorries were inducted in the company’s fleet during the period. The company also added 17 new Shop Stops to its network.

Liquidity remained a key concern for the company and will pose formidable challenge in the future as well, especially in wake of COVID 19 and related economic challenges impeding growth. PSO’s receivables from power sector declined by Rs. 15.6 Billion while on the other hand receivables from SNGPL increased by Rs. 32.4 Billion.

Regardless of the challenging socio-economic landscape, PSO is determined to continue its untiring efforts to further increase its market share with sustainable profitability.