Pakistan State Oil Company Limited (PSO) posted consolidated losses to the tune of Rs10.43 billion in the second quarter of fiscal year 2023-2024 on account of massive increase in operating and financial expenses.

In the same period of the previous year, the country’s largest oil marketing company (OMC) incurred loss-after-tax (LAT) of Rs2.08 billion.

According to a notice to the Pakistan Stock Exchange (PSX) on Thursday, the board of directors met on February 15 to review the company’s financial and operational performance and recommended a nil dividend.

On a consolidated basis, the company’s loss per share (LPS) stood at Rs25.09 in 2QFY24 as compared to LPS of Rs6.24 in the same period last year (SPLY).

PSO’s profit plunges 90% in FY2022-23

Net sales rose to Rs962.43 billion compared to Rs874.55 billion in SPLY, an increase of more than 10%.

However, the company’s gross profit declined by nearly 62%, clocking in at Rs2.97 billion in 2QFY24, compared to Rs7.78 billion in SPLY. The decrease is attributed to an increase in cost of products sold, which jumped 11% from Rs866.78 billion in 2QFY23 to Rs959.46 billion in 2QFY24.

This translates into a profit margin of only 0.3% in 2QFY24, a decrease from 1% in SPLY.

However, the OMC’s ‘other income’ jumped to Rs9.47 billion in 2QFY24, compared to Rs4.16 billion in SPLY, an increase of nearly 128%.

On the other hand, PSO’s operating costs ballooned to Rs8.19 billion in 2QFY24, up over 69%, as compared to Rs4.85 billion in 2QFY23.

The cost of finance increased to Rs16.3 billion in the second quarter of FY24, as compared to Rs8.33 billion in same period last year, a jump of over 96%. The higher finance cost during the period could be attributed to the high interest rate during the period.

Resultantly, the company’s loss before taxation stood at Rs11.7 billion in 2QFY24, as compared to Rs966 million in SPLY.