PSO_2QFY21 EPS expected to clock in at PkR9.28, Off the Analyst's Desk, Feb 17, 2021)
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AKD Research - Off the Analyst's Desk |
February 17, 2021 |
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PSO: 2QFY21 EPS expected to clock in at PkR9.28 |
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· Pakistan State Oil (PSO) is scheduled to announce its 1HFY21 result today where we expect the company to post PAT of PkR9.5bn (EPS: PkR20.2), up 47.5%YoY as heavy inventory losses for 1HFY20 kept the base low. · For 2QFY21, PAT is expected to clock in at PkR4.4bn (EPS: PkR9.28), increasing by 49.6%YoY mainly due to low base however declining by 15.5%QoQ due to lower inventory gains while marginally lower volumes will also contribute 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 decline in interest rates, we expect PSO’s finance cost to increase on QoQ basis as furnace oil demand from power sector increased during the quarter, resulting in increased need for short term borrowings. However, a significant 76% decline is expected on YoY basis. · We continue to highlight PSO as our preferred play from the sector with our TP of PkR293/sh offering upside of 16% 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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