3QFY25: PSO Sees Sharp Decline in Earnings
Staff Report:
KARACHI: Pakistan State Oil (PSO) announced 3QFY25 EPS of Rs8.7 compared to net profit of Rs12/share during same period last year. Decline in earnings is mainly due to higher taxation during 3QFY25.
We believe that PSO might incurred inventory loss of Rs4-5bn during 3QFY25. Moreover, effective tax remained higher at 64%,” analysts said.
Company’s net revenue declined by 16% to Rs711bn. The decline in revenue is likely due to reduction in retail sales, particularly volumes as cumulative sales of both HSD and MS dropped by 11%.
Company’s gross profit stood at Rs22.5bn compared Rs24.6bn during same period last year. This is likely due to higher inventory losses during 3QFY25.
Notably, company’s finance cost sharply reduced by 49%YoY to Rs7.7bn during 3QFY25 compared to Rs15bn during same period last year.
This largely stems from reduction in short-term borrowing and sharp decline in interest rates.PSO Management Suggests Equity Swap to Settle Circular Debt
Reduction in borrowing is due to better recovery of over due receivables after sharp increase in local gas prices since company supply LNG to domestic and power sector.
Though detailed accounts are yet to be released, looking at trade debt during 3QFY25, we may see over-due receivables further declining on QoQ basis,” Sherman Research said in a report.
