Industry

PSO’s Profit declines 16 percent in Q1FY19

KARACHI, October 29, 2018: Profit after tax (PAT) of Pakistan State Oil (PSO) declined by some 16 percent during the first quarter of this fiscal year (FY19) compared to same period of last fiscal year (FY18).

The country’s flagship oil marketing company has reported a PAT of Rs. 4.2 billion in Q1FY19 versus Rs 5.02 billion in corresponding period of last fiscal year, showing a decline of Rs 820 million.

The announcement was made during a Board of Management (BoM) meeting at PSO Headquarters in Karachi convened to review the Company’s performance for the quarter ended September 30, 2018.

According to PSO, reduction in other income consequential to lower interest income, higher exchange loss on account of PKR devaluation, and increase in finance cost due to higher markup rates and borrowing levels are responsible for a decline in the Company’s PAT.

The Board meeting also discussed external and internal factors that have negatively affected the local industry growth. These factors include influx of smuggled products, increasing international price trends, adulteration, heavy discounts offered by new entrants, and exploitation of the IFEM mechanism, the management believed.

According to company’s announcement, despite numerous challenges, PSO’s gross profit grew by 19 percent with an overall share of 40 percent during the period under review.

As of September 30th, 2018, PSO’s total outstanding receivables from the Power Sector, PIA, and SNGPL stood at Rs. 310 billion vs Rs. 316 billion as of June 30, 2018.  This is in addition of Rs. 21 billion recoverable from the Ministry of Finance on account of exchange rate differential on foreign currency loans and price differential claims.

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