PSO quarterly profit down by 38 percent

PSOCountry’s largest oil marketing company, Pakistan State Oil Company (PSO) has posted net profit after tax of Rs3.3 billion (EPS: Rs11.97) for the first quarter of current financial year (1QFY16), though down 38%YoY, it is 61% above the market forecast of Rs7.41/share. Keeping in mind the recent financial performance of the Company, the result signals resumption of normal service.

Key highlights of the result include: 1) margins remaining stable during the period under review reflect resilience in operations within a deteriorating oil price environment, 2) higher effective tax rate diluting the Company’s profitability, 3) a 29%YoY decline in finance costs set the OMC on a firm footing for stable earnings and 4) an improved inventory management resulting in less than anticipated inventory loss.

 With the result beating the market consensus, the trading in the scrip accelerated with an upper lock being reached. Overall, analysts expect continued resilience to be showcased, and undemanding valuations to drive price performance.


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