PSO’s Profit Sees Staggering 84% Decline in 9 Months of FY23

Pakistan State Oil Company Limited (PSO) announced its financial result for nine months that ended on March 31st, the financial year 2022-23 (9MFY23), posting a profit after tax (PAT) of Rs. 10.3 billion, down by 84 percent year-on-year (YoY) compared to Rs. 64.8 billion in 9MFY22.

On a quarterly basis, PSO’s earnings clocked in at Rs. 13.6 billion (EPS: Rs. 29.07) in 3QFY23 against Rs. 32.6 billion (EPS: Rs. 69.40) in 3QFY22 amid lower inventory gains during the quarter, according to Arif Habib Limited (AHL).

On a sequential basis, the company became profitable again amid a revision of OMC margins on the sale of MS and HSD and an increase in ex-refinery margins (resulting in inventory gains in 3QFY23 compared to inventory loss in 2QFY23.

Net sales of the company arrived at Rs. 2,517 billion in 9MFY23, up by 62 percent YoY given the higher average selling prices of petroleum products. Whereas, volumetric sales of MS, HSD, and FO declined by 15 percent, 19 percent, and 45 percent YoY, respectively. Likewise, the topline in 3QFY23 climbed up by 43 percent YoY due to the aforementioned reason. Meanwhile, the overall volumes plummeted by 28 percent YoY.

The company posted a gross profit of Rs. 58.2 billion with gross margin compressing to 2.31 percent in 9MFY23 against 5.98 percent in SPLY amid inventory losses during the period. During 3QFY23, the gross margin settled at 5.75 percent (down by 198 bps YoY) owing to lower inventory gains during the quarter.

Other income went down by 48 percent YoY in 9MFY23 to Rs. 11.5 billion compared to Rs. 22.3 billion in 9MFY22. Meanwhile, in 3QFY23, the other income plunged by 65 percent YoY arriving at Rs. 1.9 billion given the absence of significant penal income from the power sector booked last year.

The finance costs surged by 9.4x YoY to Rs. 25.1 billion in 9MFY23 due to higher interest rates. Similarly, the finance cost swelled up by 10x YoY in 3QFY23 owed to the aforementioned reason and surge in short-term borrowings.

The company booked effective taxation at 49 percent in 3QFY23 compared to 30 percent in 3QFY22.

PSO recorded earnings per share (EPS) of Rs. 21.91 for 9MFY23 and an EPS of Rs. 29.07 for 3QFY23.

At the time of filing, the company’s scrip at the bourse was Rs. 115.77, up 0.48 percent or Rs. 0.55 with a turnover of 589,081 shares on Thursday.

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