PSO half-yearly profits takes a plunge

PSO half-yearly profits takes a plunge

Friday, February 10, 2012: PSO (Pakistan State Oil) half-yearly profits for the fiscal year, July 2011- June 2012, took a plunge. This fall in half-yearly profits took the market by surprise as the market expected much higher returns
than those revealed by PSO. The company also failed to declare a dividend.

PSO net profit were already expected to fall, due to higher operating expense and tax adjustments in the first half of 2012, but no one expected it to fall this drastically. Analysts had expected the figures to be around Rs5.42
billion (about 18% lower than the last year) however the actual amount is about Rs4.58 billion (which is 36% less).

PSO’s board of directors in the meeting held on Thursday did not announce any cash dividend along with its half-yearly result although a payout of Rs5 per share was anticipated by analysts.

Sana Abdullah, IGI Securities analyst, claimed, “The board cited adverse liquidity position caused by the prevailing circular debt situation as the reason to defer dividends. PSO’s payout ratio has dropped in recent years from
77% in Fiscal year 07 to 12% in fiscal 2011, which has weighed quite heavily on the stock price.”

However, net sales continued to show impressive growth of 37% to Rs492 billion on account of higher fuel prices while growth in volumetric sales remained subdued around 2%. However, this failed to provide similar impetus to company’s
recurring income, further said Abdullah.

PSO’s market share improved to 66% of overall petroleum product sales in the country during October to December 2011 from 65% during the same period a year ago. The board members showed concern over the ever-rising balance of receivables
which stood at Rs189 billion as of December 31, 2011. The management continues to pursue independent power producers as well as the government for recovery of its outstanding receivables.

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Posted by Wajahat Javed on Feb 11 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry