PSO's half yearly profits decline by half due to lower sale and higher costs
MG News | February 18, 2019 at 10:06 AM GMT+05:00
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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