PSO reviews 9-month performance amidst mounting debt pressure

The Board of Management of Pakistan State Oil (PSO) convened on Thursday at the PSO House to review the company’s performance over the nine months period ended March 31, 2011 (3QFY11).

Sales revenue at PSO continued to register growth with an increase of 5.6% in the period under review, sales volume increased to Rs. 663 billion in comparison to Rs. 627 billion in the corresponding period last year. Despite constraints PSO posted improved after tax earnings of Rs. 9.25 billion during 3QFY11 as compared to Rs. 7.53 billion during 3QFY10. A second interim cash dividend of Rs. 3 per share was also announced by the BoM.

The country’s overall fuel consumption during the period under review has declined by 1.7% as compared to the corresponding period last year. In Black Oil, the industry declined by 1.6%, whereas the White Oil industry declined by 1.9%. However, PSO maintained its position as the market leader with the share in the Black Oil and White Oil segments standing at 77.9% and 54.3%, respectively, thereby contributing to an overall market share of 65.4%. 

In the period under review PSO was ranked 20th amongst the “Top 100 Companies of the Muslim World”. PSO was the only Pakistani company that was featured amongst these corporate giants in the annual Dinar Standard survey. This quarter PSO has also endeavored to create awareness on climate change behavior, by joining the Earth Hour campaign on March 26, 2011, the world’s largest global climate change initiative.

The Board extended a warm welcome to the new MD PSO Mr. Jehangir Ali Shah and expressed confidence in his abilities. However, the Board also showed serious concern on the spiraling circular debt situation which had receivables standing at Rs. 157 billion as of March 31st, 2011. They observed that the financial costs associated with servicing this debt coupled with consistent non-payment from the power sector continued to hurt the overall profitability of the company and directed efforts to be made to reduce the impact of the burdening financial costs through constant pursuit for recovery of receivables from the power sector entities as well as from the Government of Pakistan.