Pakistan State Oil Company Limited (PSX: PSO) announced its financial performance for 1QFY24 last week with an unconsolidated profit ofRs22 billion versus Rs1.2 billion in 1QFY23. The OMC’s earnings for the quarter jumped by over 18 times on a year-on-year basis. Not only did the company post the highest-ever earnings for first quarter, PSO achieved its highest-ever quarterly gross sales of Rs976 billion during the period.

PSO’s topline growth stood at 7 percent year-on-year in 1QFY24. The growth in PSO’s revenues due to due to higher selling prices of petroleum products as well as a jump in motor gasoline and high-speed diesel volumes by 7 percent and 8 percent, year-on-year respectively due to low base impact from last year. Meanwhile, furnace oil volumes dwindled by 87 percent year-on-year during the quarter.

The company’s gross profit was seen growing by 9 times while the gross margins were up from less than one percent in 1QFY23 to 6.35 percent in 1QFY24. The rise in gross margins was due to massive inventory gains due substantial and continued hikes in fuel prices.

PSO witnessed a decline in other income of about 48 percent year-on-year during 1QFY24 likely due to lower interest received on delayed payments. Finance cost was also seen increasing by more than double due to higher short-term borrowings. However, PSO’s bottomline was able to absorb the higher costs and post a heft earnings for the quarter, which is a complete turnaround from the previous quarter where the company posted a loss (4QFY23). Net margins for 1QFY24 jumped from 0.14 percent in 1QFY23 to 2.38 percent.