PSO Announces Record-Breaking Profits for Q1

PSO Announces Record-Breaking Profits for Q1

Pakistan State Oil (PSO) has defied all odds in a changing, epidemic, and lockdown environment. It is proof that PSO’s resilience and strength as it continues to revolutionize and improve. The financial year 2020-21 (FY21) saw PSO announce a new record high gross income of PKR 1.4 trillion, along with the highest ever after-tax profit of PKR 29.1 billion ($227 million). In FY20, the net profit resulted in an excellent earning per share of PKR 62.07 vs. a loss per share of PKR 13.77 in FY19.

The news came after Pakistan State Oil’s Board of Management (BoM) reviewed the company’s performance with its subsidiary Pakistan Refinery Limited (PRL) during a meeting on August 23, 2021 in Islamabad.

The Board of Management has approved a final dividend of PKR 10 per share (100 percent) in addition to the interim cash dividend of PKR 5 per share for 2020-21, as a result of the company’s excellent financial and operational success. For 2019, the payout is PKR 15 per share (150 percent), compared to a loss of PKR 7.6 billion in 2018. PRL, a PSO subsidiary, made a profit after tax of PKR 0.94 billion this year, compared to a loss of PKR 7.6 billion last year. In FY21, the group earned a pre-tax profit of PKR 29.6 billion as opposed to a loss of PKR 14.8 billion in FY20 on a consolidated basis.

The Board praised PSO for its flexibility and strength in a changing market environment, despite the pandemic’s frequent bouts of severity. Despite the tough economic climate and recurrent waves of the epidemic, PSO has demonstrated agility and strength in its diverse portfolio. PSO is dominating the market by a wide margin, outperforming the industry average with spectacular results. With volumes at 9.2 million tons, FY21 saw PSO achieve a market share of 46.3 percent compared to 44.3 percent in FY20 (a 21.9 percent growth).The average price of PKS as a material in FY21 was $40 per ton, with an import volume of 2.8 million tons. The POESO has grown at an annual rate of 120 bps since the start of 2018 to become China’s largest oil and gas nonferrous metals processing plant after surpassing Sino-American Nonferrous Metals Group (SINOAM).

In FY22, PEMSOC set a new peak in Motor Gasoline (MoGas) with volumes of 3.5 million tons, up 21.2% from last year and market share of 41.3% vs 38.7% the previous year – a 260 bps jump over last year’s record performance overall. Hi-Cetane Diesel also saw a strong conclusion, with volumetric growth of 21.1 percent versus industry growth of 17.5 percent, resulting in volumes of 3.7 million tons in FY21. The volumes produced in regaining market share, which rose to 47.2% from 45.8 percent the previous year, representing a boost of 140bps. In black oil, PSO grew by 53.2% with 1.7 million tons and a market share of 51.7 percent vs 46 percent in FY20.

In keeping with the GOP’s green and clean initiative, PSO was the first OMC to raise the country’s fuel standard from Euro 2 to Euro 5. The introduction of Hi-Octane 97 Euro 5, Premier Euro 5, and Hi-Cetane Diesel Euro 5 proved to be watershed moments in the business, increasing customers’ trust in PSO’s goods. The company’s value creation approach focused on high-margin goods, with revenues of High-Octane 97 Euro 5 and lubricants increasing by 177.6 percent and 11.3 percent respectively compared to last year, according to its press release. The PSO Electro EV charging station in Islamabad was also established this year.

PSO’s digital transformation is evident in this performance. With a focus on innovation and technology, PSO has continued to improve its digital capabilities to drive growth and enhance efficiency. The company made significant progress on its path to digital transformation with the opening of Pakistan’s first digitally integrated oil storage & dispatch terminal in Karachi. PSO also became the first public sector body to adopt SAP Ariba for e-procurement. Other automation projects include PSO Sahulat, an online order management system for dealers, and Automated Queue Management System for tank-lorries, as well as internal applications for fund management and employee leave management.

To achieve operational efficiency, the firm accelerated infrastructure projects. 174,000 tons of new and restored storage facilities were established, which increased the number of days’ coverage for petroleum products by a factor of four. Pipeline connections have been completed to connect operation sites with the White Oil Pipeline to make product transportation safer and more efficient. To augment its presence in Libya, 71 new vision retail outlets have been built throughout the country.

The company imported 4.9 million tons of white oil products, a new record high since the business’s inception, fulfilling its promise to keep the nation’s economy moving and ensuring a steady supply of fuel. The firm has also played an important part in the LNG industry. Under G2G terms, PSO renewed its contract with Qatar Petroleum to deliver 3 million tonnes of liquefied natural gas for ten years.This contract will increase LNG supply from PSO to 6.75 million tons per year, making it the country’s largest provider of LNG with a supply base of 6.75 million tonnes each year, surpassing BGEO and SABIC.

To boost its balance sheet further, PSO collected PKR 25.8 billion from the Power Sector, in addition to late payment surcharge revenue, to reduce finance costs by Rs. 3.2 billion. (24%)

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