PakStox Outlook

Recovering Profitability After two consecutive poor quarters , Pakistan State Oil Company Limited (PSO)  managed to achieve a net income of Rs 10.15 billion in the third quarter ending March 30, 2023. While this figure represents a 70% decline compared to the earnings in the corresponding quarter of the previous year, it a significant improvement from the loss of Rs. 4.6 billion incurred in the second quarter and the modest profit of Rs. 1.2 billion generated in the first quarter of this year. The profitability of PSO is primarily influenced by its volatile gross margin rather than fluctuations in revenue. Changes in revenue growth or decline are typically insignificant. For instance, in comparison to the second quarter, there was a 4% decline in revenue, yet the gross profit experienced a substantial increase. Similarly, when compared to the same quarter of the previous year, revenue witnessed a significant 43% increase, while the corresponding rise in gross profit was merely 6%....

Pakistan State Oil Company Limited Third Quarter Financial Statement 31 Mar 2023 The petroleum industry saw a significant decline of 19.6% in white oil sales - a dip of 17.1% in motor gasoline and 24.9% in diesel, mainly due to a slowdown in economic activities and inflating fuel prices. Additionally, the demand for black oil also declined by 32.1% as a result of limited furnace oil-based power generation given the reduced demand for electricity across the country. [PSO recorded] a 2.9% increase in its white oil market share compared to the same period last year, PSO sold around 51% of the industry volume. The major contributor was diesel, in which the company increased its market share by 4.1%, closing the period at 54.4%. Circular debt continues to be a major concern. Receivables from SNGPL increased by 65% from March 31, 2022, increasing PSO's average borrowings by 157% and finance cost by a staggering 995 basis points compared to the same period last year. A number of option...