KARACHI: The Board of Management of Pakistan State Oil reviewed the
performance and accounts of the company for the first half of year 2006-07
on February 22, 2007.
The Board observed that during the review period of July 1 to December
31, 2006, the industry off-takes of Black Oil were 3,515 K Tons vs 1,998
KTs sales in the corresponding period last year, i.e. an increase of
76%. The off-takes of White Oil, however, were lower by 2%, i.e. 4,637
K Tons vs 4,725 K Tons last year. The overall off-take of all fuel products
was 20% higher than last year.
PSO’s sale of Black Oil was 3,474 K Tons, which was 76.4% higher
than 1,969 KTs in the previous year. In White Oils, although the industry
sales declined, PSO successfully marketed 2,743 KTs vs 2,710 KTs last
year. As such PSO improved its market share in Motor Gasoline from 45.2%
to 46.3%, in High Speed Diesel from 57.5% to 60.5%, and in Kerosene
Oil from 59% to 71.5%. PSO’s market share in fuels increased from
65% to 67.4%.
The profitability of oil marketing companies in the first half of the
year was adversely affected by a number of factors, i.e. inventory losses
due to almost 20% lower prices of oil in the international market; lower
margins regime since March 2006 and very high financing cost due to
huge outstanding receivables from the GoP. Concerted efforts are continuously
being made for the recoveries from the government to lower the impact
on profitability and cash flow.
As such, despite higher sales volumes and record sales revenue of Rs.
198 billion, higher by Rs. 44 billion from last year, the company’s
profits dropped significantly vs last year when it had the benefit of
inventory gains as oil prices were continuously increasing in that period.
PSO’s profit before and after tax this year were Rs. 1.8 billion
and Rs.1.1 billion respectively as compared to Rs. 5.3 billion and Rs
3.4 billion last year.
The Board of Management announced a 1st interim cash dividend of Rs.
6/- per share translating into a cash payout of Rs. 1,029 million to
The company marked 30 years of its existence on December 30, 2006 through
celebrations across its nation-wide network. At a ceremony, the management
also recognized the services of employees who had completed three decades
of association with PSO.
The Pakistan Chapter of the World Business Council for Sustainable Development
was also launched in the review period with PSO being the founder member.
In the field of Health, Safety and Environment (HSE), the six months
under review were again a zero-accident period. PSO received the NFEH
HSE Excellence Award 2006 as well as the Occupational Health & Safety
Excellence Award 2006 from HELP International.
The company introduced new Prepaid Cards with various currency denominations
and colors to cater to the market needs; entered into a customer facilitation
alliance with Saudi Pak Commercial Bank through the launch of ATMs at
PSO flagship retail outlets; and signed an agreement to facilitate Sui
Southern Gas Company customers in payment of their gas bills at PSO
The Board observed the company continues to maintain its thrust on upgradation,
expansion and technology-driven investments as well as high profile
enhancement in business and market share through diversification and
The Board expressed its confidence that the management remains well
poised to realign its strategic corporate initiatives and plans in time
to take advantage of changing global and local business environment
to provide ever-better products and services to its customers.