PSO_2QFY21 EPS clocked in at PkR9.32 - in-line with expectation, (AKD, Off the Analyst's Desk, Feb 18, 2021)
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AKD Research - Off the Analyst's Desk |
February 18, 2021 |
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PSO: 2QFY21 EPS clocked in at PkR9.32 – in-line with expectation |
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· Pakistan State Oil (PSO) announced it 1HFY21 result today where company posted PAT of PkR9.5bn (EPS: PkR20.28), up 48%YoY as heavy inventory losses for 1HFY20 kept the base low. The result was in-line with our expectation. · For 2QFY21, PAT clocked in at PkR4.4bn (EPS: PkR9.32), increasing by 51%YoY mainly due to low base however declining by 15%QoQ due to possible inventory losses while marginally lower volumes also contributed to the cause. · PSO's overall market share for 2QFY21 declined to 45% against 48% for 1QFY21. Major decline was witnessed in furnace oil with PSO's market share standing at 45% against 54% for 1QFY21 while an increase in retail fuel volume of 8%QoQ against 12%QoQ of the industry resulted in retail fuel market share declining to 44% for 2QFY21 against 45% for 1QFY21. · Despite increased sales of furnace oil to power sector, PSO's finance cost decreased on QoQ basis while a significant decline of 85% was witnessed on YoY basis. · Along with the result, company announced an interim dividend of PkR5/sh. The dividend announcement was against our expectation as company is yet to receive funds from circular debt clearance. · We continue to highlight PSO as our preferred play from the sector with our TP of PkR293/sh offering upside of 14% from last close. Number of triggers are expected to keep the stock in limelight including a much awaited revision in OMC margins and clearance of circular debt which will significantly ease up cash flow issues of the company. |
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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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