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PSO: Higher volumetric sales, inventory gains boosted earnings

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October 28, 2021 (MLN): Pakistan State Oil (PSO) announced its 1QFY22 financial result with a consolidated profit after tax of Rs11.54 billion (EPS: Rs24.93), up by a whopping 2.21x YoY when compared to the net profit of Rs5.23bn (EPS: Rs11.07) earned in the corresponding period last year.

The massive increase in profitability was attributable to robust growth in sales volume and higher inventory gains.

Pursuant to the financial statement provided to PSX, the net sales of the company jumped by 64% YoY on the back of a 34% YoY increase in volumes as economic growth accelerates and 70% YoY higher international average oil prices. Resultantly, the gross margins expanded by 0.51ppt to 4.78% during the first quarter of the ongoing fiscal year.

Pertinently, the changes in ex-refinery prices resulted in inventory gains of Rs7bn in 1QFY22 compared to inventory gains of Rs1.5bn in the same period last year, said Arsalan Hanif, Research Analyst at Arif Habib.

Meanwhile, the other income surged by around 48% YoY to Rs1.80bn in 1QFY22, strengthening the financial health of the company.

On the costs front, PSO’s admin and distribution & marketing expenses went up by 18% and 20.4% YoY respectively, while other expenses swelled by 2.53 times YoY during the period under review.

Notably, the provision costs for impairment on financial assets declined by 55% YoY to Rs216mn, supporting its bottom-line. The finance costs of the company fell by 7.70% YoY to Rs1.08bn on an account of lower reliance on short-term borrowings and a lower interest rate environment.

Further, the company recorded effective taxation at 34% in 1QFY22 compared to 33.6% in 1QFY21.

Consolidated Statement of Profit or Loss for the Quarter ended September 30, 2021 ('000 Rupees)




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Cost of products sold




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Administrative cost




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Profit from operations




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Posted on: 2021-10-28T15:03:42+05:00