PSO declares 4.7 billion FY07 profit; 110% final dividend

PSO declares Rs 4.7 billion FY07 profit; 110% final dividend
KARACHI: The Board of Management of Pakistan State Oil Company Limited (PSO) reviewed the performance of the company for the financial year ended June 30, 2007 on Tuesday, August 7, 2007 at the company’s head office and approved the audited financial statements for the year.
Mr. Pervaiz Kausar, Chairman, BoM, presided over the meeting.
The board observed that during financial year 2007 the company achieved good performance with a turnover touching Rs 411 billion (US$ 6.8 billion) compared with Rs 353 billion a year ago, an increase of 17%. Profit before tax recorded at Rs 7.1 billion versus Rs 11.4 billion last year and profit after tax at Rs 4.7 billion against Rs 7.5 billion registered in previous financial year. The earning per share was Rs 27.34 versus Rs 43.87 last year.

Based on these results, the board announced a dividend of Rs 11 per share. Combined with the earlier interim dividends aggregating Rs 10 per share, the total dividend for the year rose to Rs 21 per share translating into a total payout of Rs 3.6 billion to the shareholders.

The first half of the review period saw a declining trend of international oil prices resulting in heavy inventory losses to the industry in general and the company in particular. However, in the last two quarters the trend reversed nullifying the negative impact to some extent. The earnings were also adversely affected by a substantial increase in financing cost on mounting dues from the government on account of subsidy on retail price of diesel as well as the full-year impact of 20% margin reduction.

Black oil industry consumption increased by 46% mainly due to higher off-takes of furnace oil by the power producers. White oil industry consumption remained subdued with a decline of 2% due to availability of alternate fuels and higher gasoline prices. Overall, PSO led the industry with a market share improvement from 65% last year to 69%, despite increasing competition.

PSO’s presence with around 3,700 sites across the country, including over 1,600 New Vision Retail Outlets and PSO cards, continued to provide impetus to retail sales. The company completed refurbishment of its Lubricant Manufacturing Terminal at Korangi, Karachi, which will further improve its performance in the lubricant business during financial year 2008.

PSO continued using technology to provide conveniences to customer. Under technological thrust, new initiatives and marketing alliances the company in the review period introduced ATM and utility bill payment facilities, new fleet management solution for PSO card customers, new denomination of prepaid cards and GPRS and, V-SAT connectivity with retail sites. It also enhanced its point-of-sale terminal network to facilitate and automate business transactions to more than 1,300 retail sites.

As part of its corporate social responsibility, company continued to support social, educational, health, sports and community causes. The company and its employees took active part in the relief efforts for the flood victims in Balochistan and sent consignments of relief goods and ensured fuel supplies to the affected areas. Employees also contributed one-day salary to the President’s Disaster Relief Fund.

During the year, company participated in the Oil and Gas Conference (OGCON), Ideas 2006, Expo 2007 and Oil, Gas and Energy Conference (POGEE) 2007. It continued its active role at national/international levels and Pakistan chapter of World Business Council for Sustainable Development was expanded with more members joining in.

The board acknowledged and appreciated the efforts and contributions by the dedicated PSO employees, dealers, contractors, vendors and other business partners and expressed its confidence that the company will continue to take up business challenges in the future through its highly motivated team, superior services, innovations and growing customer loyalty.
 
Mr. Pervaiz Kausar, Chairman, BoM, presiding over the meeting.