- Apr 11, 2017
Pakistan State Oil (PSO): 20%YoY lower EPS expected in 9MFY18
19 April 2018
Pearl Securities Limited
- The board of Pakistan State Oil is scheduled to meet on March 21st, 2018 to announce its 9MFY18 financial results.
- We estimate PSO to register profit after tax of PKR11.28bn (EPS PKR34.59) in 9MFY18 versus PKR14.16bn (EPS PKR43.42) in the corresponding period last year, exhibiting a substantial decline of 20%YoY. The expectation of dwindling bottom-line is primarily on the account of decline in other income, higher operating expenses (FX losses due to around 10% USD/PKR devaluation) and inventory losses incurred during 9MFY18.
- Along with the result, we anticipate PSO to declare an interim cash-dividend of PKR5.0/share.
- In terms of quarterly performance, 3QFY18 earnings are expected at PKR2.75bn (EPS PKR8.45) versus PKR4.14bn (EPS PKR12.70) registered in 3QFY17, representing a hefty decrease of 34%YoY mainly due to decline in HSD/FO volumes 3%/69% YoY and 1.07pps YoY lower margins.
- Net sales of PSO are expected to escalate by 18%YoY to PKR743.60bn during 9MFY18 due to higher domestic POL prices following the surge in the international oil prices, supported by strong demand for retail fuels, as PSO’s MS and HSD sale volumes were up 12% and 5% YoY respectively. However, FO sales volumes declined by 29%YoY after change in government policy in Nov’17 to shift power generation mix to cheaper fuel sources (RLNG & Coal) and subsequent elimination of expensive FO based power generation.