Financials

Analysis

In FY25, the Company reported a profit after tax of Rs. 20.9 bn, primarily driven by the following contributing factors:

• Gross Sales stood at Rs. 3.4 trillion, compared to Rs. 3.8 trillion in FY24, primarily reflecting price normalization in the global and local markets. Despite this adjustment, the Company maintained its strong market position across key segments.

• Gross Profit remained stable at Rs. 96.7 bn, in line with the previous year, reflecting consistent margins on white and black oil products and effective cost management strategies.

• Other Income amounted to Rs. 22.4 bn, moderated compared to FY24 primarily due to lower interest income and a decline in the share of profit from associates.

• Operating profit totaled Rs. 86.2 bn in FY25, reflecting a decline of 6.4% from Rs. 92.1 bn in FY24, mainly driven by inflationary impact on administrative and marketing expenses, coupled with a decline in other income.

• Finance costs decreased substantially by 35.6% to Rs. 33.7 bn, compared to Rs. 52.3 bn in FY24, due to significantly lower interest rates and reduced average borrowings, contributing positively to overall profitability.

• Gross Sales

  Gross sales was highest in second quarter, driven by highest quarterly sale volumes and favorable price movement

• Gross Profit

  Gross profit was highest in first quarter, reflecting higher volumes and higher margins on certain products.

• Other income

  Other income was higher in second and last quarter, mainly due to receipt of dividend income and financial income pertaining to line-fill cost.

• Finance Cost

  Finance cost was highest in the first quarter primarily due to elevated interest rates and highest average borrowings during that period. The decline in subsequent quarters mainly reflects the downward trend in interest rates.

• Profit After Tax

  Profit after tax was highest in second quarter, primarily driven by higher other income alongside reduced finance costs.

• Analysis

  The cash flow statement for the past six years highlights the following fluctuations in the Company’s cash flows:

• Operating Activities

  Operating cash flows reached its highest level in FY25 compared to last few years, increasing significantly mainly due to effective management of trade receivables and inventory, which reduced working capital requirements. Higher trade payables further supported this strong performance.

• Investing Activities

  Negative cash flows from investing activities reflect the Company’s continued investments in assets and strategic diversification initiatives, underscoring its commitment to expanding the operational base and strengthening long-term growth prospects.

• Financing Activities

  Financing cash flows turned negative, reflecting the Company’s focused recovery drive, which reduced receivables and created financial capacity for debt repayment.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• The interest cover ratio improved in FY25, due to stronger operating profitability, reduced finance costs and enhanced earnings capacity to service debt obligations.

• The increase in net assets per share reflects growth in shareholders’ equity, supported by retained earnings, solid profitability, and prudent capital management, reinforcing financial stability and long-term value creation.

• The reduction in the financial leverage ratio is attributable to debt repayments made during the year, thereby mitigating the Company’s financial risk profile.

• The decline in the weighted average cost of debt during FY25 is driven by improved borrowing conditions and a strategic move towards more cost-efficient debt financing.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• During FY25, the cash to current liabilities ratio improved, reflecting higher liquidity, driven by increased cash reserves following the repayment of short-term borrowings.

• A notable improvement in cash flow from operating activities was observed during the year, largely attributable to effective inventory management and decline in trade receivables.

• In line with increased cash flow from operating activities, the cash flow from operations to sales ratio and the cash flow to capital expenditure ratio improved significantly compared to the previous year.

• The cash flow coverage ratio showed significant improvement, signaling better coverage of cash commitments, primarily resulting from stronger operating cash flows compared to the prior year.

• The current and quick ratios improved, underscoring the Company’s better liquidity position.

• A positive Free Cash Flow to the Firm reflects robust financial health, indicating the Company’s ability to generate sufficient operational cash flow to support its capital expenditures and investments.

• The rise in Free Cash Flow to the Equity holders can be attributed chiefly to enhanced operational cash flow, lower debt servicing obligations, and strategic investment decisions.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• Earnings per Share (EPS) & Market Value per Share

  The EPS increased to Rs. 44.54 in FY25 from Rs. 33.79 in FY24, reflecting robust profitability and operational efficiency. This improvement contributed to the market price per share rising to Rs. 377.53, indicating strengthened investor confidence.

• Price-to-Earnings (P/E) & Price-to-Book Ratios

  The P/E Ratio improved to 8.48 in FY25 from 4.92 in FY24, reflecting increased investor optimism driven by stronger earnings growth and improved market sentiment.

  The stock’s Price-to-Book Ratio of 0.71 reflects a market valuation considerably lower than its net asset value, implying undervaluation.

• Dividend Analysis

  PSO declared Rs. 10/- dividend per share in FY25, supported by a robust dividend cover ratio of 4.45, demonstrating a prudent balance between rewarding shareholders and funding sustainable growth.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• The inventory turnover ratio remains strong, with 11.31 in FY25 reflecting the Company’s efficient conversion of inventory into sales, reducing holding costs and minimizing obsolescence risk.

• A debtor turnover ratio of 7.31 in FY25 indicates robust collection processes, ensuring healthy cash flow. The Company's ability to collect receivables efficiently is reflected in the consistent ratio above 7 over recent years.

• The creditor turnover ratio of 8.69 in FY25 highlights the Company's prudent management of payables. The Company effectively balances supplier relationships with cash flow needs by optimizing payment cycles.

• The operating cycle of 41 days in FY25, shows imporvement from last year and remains within an efficient range, showcasing the Company’s capability to manage the overall process from inventory purchase to receivables collection effectively.

• The total asset turnover ratio of 3.40 in FY25 demonstrates efficient utilization of the Company's assets to generate sales indicating solid operational efficiency. The ratio has declined from FY24 due to reduction in international oil prices during FY25.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• Production per employee declined slightly from prior year, primarily due to a strategic increase in headcount to support future growth, enhance capabilities, and build operational resilience.

• Revenue per employee has decreased due to reduction in revenue on account of decreased in international oil prices during FY25.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• Plant Availability Ratio remains above 1, with a slight moderation reflecting optimized scheduling and higher operational demands.

• Customer Satisfaction Index is monitored based on Customer Responses.

Analysis

As of June 30, 2025, variation as compared to June 30, 2024 is as follows:

• Spare Inventory as percentage of asset cost has declined reflecting improved inventory management.

• Maintenance cost as percentage of operating expenses has increased this year on account of various budgeted maintenance activities undertaken this year.