FY22: PSO’s profit skyrockets to Rs95.7bn, up 223% driven by strong sales

Pakistan State Oil (PSO) reported a 223.85% spike in its profit, which clocked in at Rs95.7 billion during the year ended June 30, 2022 owing to higher volumetric sales, huge inventory gains and higher other income.

The company had reported a profit of Rs29.6 billion in the same period last year, said a notice sent by the company to the Pakistan Stock Exchange.

Accordingly, earnings per share (EPS) of the firm clocked in at Rs194.35 in the year under review against Rs62.23 in the prior fiscal year.

Despite the lofty EPS, the firm announced cash dividend of Rs10 per share.

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The topline of the firm nearly doubled as it rose from Rs1.2 trillion in FY21 to Rs2.5 trillion.

“During FY22, company’s sales surged to a historic level which is mainly due to significant increase in volumetric sales by around 29% year-on-year to 11 million tons coupled with 71% increase in oil prices (Arab Light),” Topline Securities said in a report.

Moreover, other income of the company surged to Rs25.3 billion in FY22, up 30.55% compared to Rs19.4 billion in FY21.

According to Topline Securities, the rise in other income was “likely due to payments from power sector, which PSO recognises on cash receipt basis.”

The distribution and marketing expenses ticked up from Rs12 billion in FY21 to Rs12.99 in FY22. Similarly, the administrative expenses surged 28.3% to Rs4.77 billion.

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Other expenses of the oil company soared nearly 3 folds as they ticked up from Rs4.05 billion to Rs14.77 billion.

Interestingly, the company’s finance cost nosedived from Rs11.5 billion in FY21 to Rs5.9 billion in FY22.

A report from Arif Habib Limited stated the finance costs dropped given lower late payment surcharge.

“During FY22, the company recognised provision for impairment on financial assets of Rs5.1 billion as against Rs898 million last year likely due to accounting for implementation of IFRS-9.

“During the last quarter of FY22, the company incorporated the super tax impact in the calculation of tax which led to the effective tax rate of 61% in 4QFY22 taking the overall FY22 effective tax rate of 42% vs. 34% in FY2,” the brokerage house said.

During the day, the share price of the company fell Rs12.37 to end at Rs171.32 with 5.3 million shares changing hands at the PSX.