PSO – earnings pouring

The oil marketing companies have seen robust sales of petroleum products in most ofFY22.Higher volumes as well as higher petroleum product prices were the key factors behind PSO’s revenue growth in FY22. The financial performance of Pakistan State Oil Limited (PSX: PSO) for FY22 shows that the largest oil marketing company saw a whopping increase in its profitability, which stemmed a fat topline. The volumes for PSO’s products MS, HSD, and FO grew by 15 percent, 26 percent, and 62 percent, respectively – year-on-year. Noticeable growth in volumes also helped PSO grow its market share in all the three products.

PSO’s gross profit growth was whopping primarily due to significant inventory gains on the back of increasing oil prices. Other income increased by 32 percent year-on-year owed to higher interest received on delayed payments. On the expenses side, the distribution and marketing expenses remained lower. However, staggering growth in other expenses (approximately three times) was most likely due to exchange losses. Finance cost decline in FY22 due to lower late payment surcharge.

PSO’s operating profits grew by more than 183 percent year-on-year in FY22 with support from other income as well as the topline and gross profit growth. PSO’s bottom-line surged by almost three times in FY22 where much of the growth came from volumetric growth andinventory gains, reviving consumption and demand of petroleum products, price increase, higher other income as well as the company’s increased retail footprint and market share.