Earnings Preview: Inventory gains and higher volumes to lift PSO’s profitability

MG News | February 18, 2020 at 11:22 AM GMT+05:00

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February 18, 2020 (MLN): Pakistan State Oil Limited (PSO) is scheduled to unveil financial results for 1HFY20 on Tuesday i.e. today.

According to the projection table given below, all brokerage houses expect the company to post a net profit of around Rs 5.13 billion to Rs 6.65 billion which translate into an EPS ranging from Rs 10.9- Rs 15.08.

Research House	1HFY20E Net PAT	Earnings per share (EPS)	1HFY19A Net PAT	% change YoY
IGI	Rs 5.73 billion	Rs 12.20	Rs 4.25 billion	35%
Arif Habib	Rs 6.1 billion	Rs 13.01	Rs 4.25 billion	44%
Pearl	Rs 6.29 billion	Rs 13.40	Rs 4.25 billion	48%
Summit Capital	Rs 5.13 billion	Rs 10.9	Rs 4.25 billion	21%
Darson*	Rs 6.2 billion	Rs 13.24	Rs 4.25 billion	46%
AKD*	Rs 6.65 billion	Rs 14.18	Rs 4.25 billion	56.7%
Topline*	-	Rs 15.08	Rs 4.25 billion	-
IMS*	-	Rs 13.89	Rs 4.25 billion	-
BIPL*	-	Rs 12.80	Rs 4.25 billion	-

The increase in profitability is expected mainly on the back of inventory gains during 1HFY20 when compared to the inventory loss in the same period last year.

During the period under review, PSO's sales revenue is anticipated to jump owing to growth in sales volumes of MS, HSD and FO which might provide support to its bottom line. Gross profits of the company are predicted to increase in 1HFY20 due to inventory gains.

However, the finance cost is expected to increase on an account of an increase in borrowings with higher interest rates.

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