PSO - 2QFY23 LPS clocked in at PkR9.7, below expectations, (AKD Off the Analyst's Desk Feb 17, 2023)
AKD, Off the Analyst's Desk
PSO: 2QFY23 LPS clocked in at PkR9.7, below expectations
Pakistan State Oil (PSO) announced result for 1QFY23 where company posted unconsolidated LAT of PkR4.56bn (LPS: PkR9.71), down by 4.8x on a QoQ basis against PAT of PkR1.2bn (EPS: PkR2.55) during the previous quarter.
- The result came in significantly lower than our expectations of PAT of PkR2.39bn (EPS: 5.1) where in major deviations occurred due to higher inventory losses during the quarter, estimated at ~PkR13.4bn as refined fuel prices fell exorbitantly during the quarter, subsequently resulting in gross margins to end at 0.6% for the period.
- Topline of the company stood at PkR843bn, changing by 61%/-2% on a YoY/QoQ basis during 2QFY23, supported by increased retail prices, which have been up significantly since May’22, although retail offtakes recovered by 26%QoQ during the period vs. 1QFY23.
- To note, significant inventory losses arose (PkR13.4bn vs. our estimate of PkR12.2bn) on the back of falling fuel prices internationally, as ex-refinery prices for MS/HSD fell by 18%/11% during 2QFY23 as compared to the quarter before.
- Another major difference occurred due to higher finance costs of PkR7.66bn (up 8.7x on an YoY basis), as short term borrowings ballooned up to PkR248bn as per latest accounts (up by PkR92bn vs. June’22).
- Effective tax clocked in at –ve 17.5% (vs. 70% last quarter) as company posted LBT of PkR4.56bn during the period
AKD Research
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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