PSO_1QFY21 unconsolidated EPS clocked in at PkR11.0 - Lower than expected , (AKD, Off the Analyst's Desk, Oct 27, 2020)
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PSO: 1QFY21 unconsolidated EPS clocked in at PkR11.0 — Lower than expected |
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· Pakistan State Oil announced result for 1QFY21 where company posted PAT of PkR5.1bn (EPS: PkR10.96) against our expectation of PkR7.1bn (EPS: PkR15.1) mainly on the back of lower than expected inventory gains. After reporting a loss in 4QFY20, company witnessed return to profitability while on YoY basis, profitability improved by 45.8%. · With increase in prices of MS/HSD (after oil prices rebounded ) coupled with volumetric growth of 22%QoQ as restrictions imposed to restrict spread of COVID-19became a drag, net sales witnessed an increase of 27%QoQ however, on YoY basis, lower retail prices resulted in decline of 14.9%. · On the back of increase in ex-refinery prices of MS/HSD by 91.2/60.7% towards the end of Jun'20, we expected company to record inventory gains of PkR6bn however inventory gains for the quarter clocked in at PkR2bn, according to our estimates potentially due to lower than expected inventory days. · Distribution expenses decreased by 1.1/25.7% YoY/QoQ despite increase in volumes of 10%YoY while admin expenses witnessed an increase of 6.9/18.6% YoY/QoQ. Other income decreased on the back of decline in interest rates coupled with absence of late payment surcharge. On the other hand, finance cost decreased significantly (-67.5/70.6% YoY/QoQ) after short term borrowings declined to PkR66bn in Jun'20 from PkR149bn in Mar'20. · Despite a lower than expected result, we expect a host of factors to keep PSO in limelight including upcoming OMC policy expected to improve competitive dynamics, clearance of circular debt and increase in storage to protect market share. |
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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