KARACHI: The Board of Management (BoM) of Pakistan State Oil Company Limited (PSOCL) convened on Tuesday at the PSO headquarters to review the Company’s performance for the first Quarter (Q1) of the financial year 2014-15 (FY2015).
In the period under review, PSO’s Profit After Tax (PAT) has been Rs 5.2 billion, which is 59% higher than the budgeted PAT of Rs 3.3 billion for Q1 FY 2015. The budget was based on the fact that a bulk of interest income from IPPs received in the first quarter of last year is expected to be received in a steady stream on a sustainable basis during this year. Therefore, PAT including interest income from IPPs had been lower than that during Same Period Last Year (SPLY) (Rs 5.2 billion vs Rs 7.8 billion). However, profit from operations (excluding IPP interest income) was Rs 9.11 billion, 39% higher than that if Rs 6.55 billion during SPLY.
PSO retained its market leadership in Black Oil and White Oil, and successfully met the demand of fuel across the country despite the hardships and supply chain disruptions faced because of the power sector’s inability to pay for fuel in a timely manner. Accordingly, the turnover of Rs 355 billion during Q1 FY15 has been 5% lower than that of Rs 364 billion during SPLY largely due to the effects of circular debt, floods and civil disturbance in certain areas on the vast retail network of PSO.
The sales portfolio was managed by restraining fuel oil sales in view of liquidity issues posed by increasing power sector receivables, and no discounts on sale of HSD were given during the period under review. Despite improvement in gross profit as percentage of sales, the bottom line of the Company was negatively impacted upon by the burden of increased mark-up of Rs 2.3 billion vs. Rs 0.5 billion during SPLY on account of the circular debt. The impact was mitigated by the lower exchange loss of Rs 875 million vs. Rs 3.7 billion during SPLY due to devaluation of the Pak Rupee.
The Board expressed concern over increasing receivables from the power sector despite best efforts for recovery thereof made by the Company and the relevant Ministry. The matter is under resolution.