February 18, 2019 (MLN): Pakistan State Oil (PSO) has announced a 50% decline in half yearly profits for the period ended with December 2018 as its earnings stand at Rs.4.2 billion (EPS: Rs.10.86), down from Rs.8.5 billion recorded same period last year.
The drop in profitability during the first half of fiscal year 2019 (FY19) has exceeded the market's expectation of a 36% decline. In the face of tough competition from other oil marketing companies, the sales of furnace oil, MS and High-speed Diesel (HSD) slipped noticeably, resulting in merely 1 percent increase on the company’s topline (Rs.662.7 billion).
However, since sales tax and IFEM registered considerable declines (-31%), the net revenue (Rs.572.5 billion) turned out to be 9.6% higher than that recorded last year (Rs.522.5 billion), although after accounting for cost of sales (Rs.556.5 billion) the company’s gross profits (Rs.15.9 billion) shrunk by 14.5%.
Adding to this, PSO’s finance cost (Rs.3.9 billion) grew substantially (by 2 billion) in light of higher borrowings to meet the working capital requirements, leading to a 45% decline in pre-tax profits (Rs.7 billion).
|
Financial Results for the half year ended December 31, 2018 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Dec-18 |
Dec-17 |
% Change |
|
Gross sales |
662,726,817 |
653,440,150 |
1.42% |
|
Sales tax and IFEM |
(90,183,587) |
(130,948,737) |
-31.13% |
|
Net Sales |
572,543,230 |
522,491,413 |
9.58% |
|
Cost of products sold |
(556,546,780) |
(503,791,356) |
10.47% |
|
Gross Profit |
15,996,450 |
18,700,057 |
-14.46% |
|
Other income |
2,650,049 |
2,969,337 |
-10.75% |
|
Operating cost |
(7,532,264) |
(7,020,543) |
7.29% |
|
Profit from operations |
11,114,235 |
14,648,851 |
-24.13% |
|
Finance costs |
(3,855,407) |
(1,779,242) |
116.69% |
|
Share of (loss)/profit of associates – net of tax |
(65,309) |
210,554 |
|
|
Profit before taxation |
7,193,519 |
13,080,163 |
-45.00% |
|
Taxation |
(2,944,474) |
(4,558,102) |
-35.40% |
|
Profit after taxation |
4,249,045 |
8,522,061 |
-50.14% |
|
Earnings per share – basic and diluted (Rupees) |
10.86 |
21.78 |
-50.14% |
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