Oil market leader reports unprecedented profits: PSO six monthly earnings rise by 150%

Performance of MD PSO commended by Board of Management

Karachi, February 28th, 2014: The Board of Management (BoM) of Pakistan State Oil Company Limited (PSOCL) convened at the PSO headquarters, to review the Company\'s performance for the first half of financial year 2013-14 (1HFY14).

In the period under review, PSO\'s revenues rose 15% to Rs 727 billion for the half year ended 31st December 2013 as compared to Rs 630 billion during the Same Period Last Year (SPLY). The company\'s after tax earnings rose by 150% percent to Rs 15.8 billion as compared to Rs 6.31 billion during SPLY. These all time high six monthly earnings surpassed the after tax earnings of Rs 12.6 billion during the entire financial year 2012-2013 by 25%. PSOs share price recorded an impressive growth, outperforming KSE 100 share index by 11% during the second quarter ended December 31, 2013. It is indeed an evidence of strong investor confidence in the management of the company.

PSO led the market with a share of 63% while its market share in black oil and white oil stood at 75% and 53% respectively during the six month period ended December 2013. During this period, the company\'s sales of furnace oil and motor gasoline grew by 13% and 15% respectively. A decline of 6.4% in sale of high speed diesel during the first quarter was followed by a growth of 3.5% during second quarter resulting in 1% decline over the six months period.

The company realized substantial cost efficiencies. The distribution and marketing expenses increased by merely 4% against 15% increase in sales. There has been an increase of 2% in the administrative, distribution and marketing expenses in comparison with 13% increase on average during the corresponding periods of the last three years and an inflation of 9.2% during the half year.

The positive impact of the sales performance and cost efficiency on the bottom line of the Company was partially offset by the sharp devaluation of Pak Rupees against US Dollar of approximately 6.5% as compared to 2.3% during SPLY. This resulted in an exchange loss of Rs 2.2 billion as compared to Rs 0.96 billion during SPLY. Recovery of interest from private power producers contributed positively to the bottom line although it caused an increase in finance cost.

In view of the strong performance of the Company, the Board declared a dividend of Rs 4 per share and 10% bonus shares.

Expressing concern over the increased balance of receivables from the power sector, the Board directed the management to continue working closely with the concerned government departments and customers for timely realization of due payments against the fuel supplies.

The Board unanimously resolved to place on record its commendation for outstanding leadership provided by Mr. Amjad Parvez Janjua, Manging Director & CEO of PSO, resulting in substantial improvements in performance, competitiveness, culture and reputation of PSO. The Board duly acknowledged the hard work of the PSO employees and their contribution to impressive performance and strong half yearly results of the company. The Board expressed gratitude to customers and business partners of the company as well as the Government of Pakistan for their unwavering support to PSO in achieving all time best results in terms of revenue and profitability. The management thanked the Board for their guidance and support and assured continued efforts to increase shareholder value in the future.