Pakistan State Oil Ltd declared a second interim dividend of 30 percent, totalling to 100 percent in the nine months ended on March 31, despite decline in furnace oil sales as some of the consumers used gas and coal because of rise in oil prices.
The Board of Management of Pakistan State Oil (PSO) on Tuesday reviewed the company''s performance during the third quarter ended on March 31, 2004. Pervaiz Kausar, Chairman, BoM, presided over the meeting.
The Board observed that during July 2003-March 2004 period, the company sold around 6 million tons POL products translating into sales revenue of approximately Rs 134 billion.
The company recorded profit before tax of Rs 4.4 billion, down by 5.9 percent over previous year period, while profit after-tax stood at Rs 3 billion.
The nominal decline in earnings was due to loss of fuel oil business as a result of further improvement in natural gas availability and hydel generation. Had PSO sold similar volume of fuel oil during the review period, the company would have not only exceeded sales revenues but would have also posted much higher earnings over the corresponding period.
Based on the performance, the Board of Management announced a cash dividend of Rs 3 per share (30 percent) to its shareholders, equivalent to the corresponding period of last year.
Combined with the earlier declared interim half-yearly dividend of 70 percent (Rs 7 per share), the total pay-out comes to 100 percent for the first nine months of the FY-04.
This will result in cash pay-out of Rs 1.7 billion as dividend.
The Board noted that the declining consumption trend countrywide in fuel oil persisted during the quarter, in line with the government''s directive of more reliance on indigenous resources, which generate substantial savings in import bill.
However, the impressive performance of the company in white oil sales and stringent cost cutting measures undertaken by the management almost neutralised the impact of black oil decline.
Despite an impressive growth of 5.4 percent in white oil consumption, another indicator of economic activities during the review period, the POL country consumption was shadowed by an enormous 56 percent decline in fuel oil consumption over last year''s volumes, which caused the POL industry to shrink by 21 percent.
During the review period, the company recorded an approximate 20 percent growth in Mogas sales, against a growth of 15 percent in the industry consumption of Mogas, resulting in market share of 44 percent against 42 percent for last year''s corresponding period.
HSD sales also displayed an impressive picture and the company increased its share to 60.3 percent.
The impressive performance of PSO, competing with three multinational OMCs, has been made possible mainly due to the management''s thrust on cost-effective operations, enhanced productivity and building business partnership concept with all of its affiliates.