Pakistan State Oil (PSO): 4QFY20 LPS of Rs20.2 vs. 4QFY19 EPS of 9.9 (loss higher than expectations)
- Pakistan State Oil (PSO) posted 4QFY20 unconsolidated loss of Rs20.2/share vs. EPS of Rs9.9 in 4QFY19, with loss coming in higher than the industry’s expectations.
- Net sales depicted a 34% YoY decline during the quarter, while COGS also decreased by 29% YoY. This resulted in negative gross margins for the quarter of 3.58% compared to 3.62% for 4QFY19 and 1% in 3QFY20.
- The lower-than-expected gross margins are potentially due to inventory losses during the quarter.
- Net sales for FY20 are down by 4% YoY driven by an overall decline of 6.1% in volumes largely due to lower furnace oil offtakes. HSD saw an increase of 6.5% YoY while MS grew by 5.4% YoY.
- Other income is up by 39% YoY in FY20 primarily owing to high penal income.
- On the other hand, the company’s finance cost increased by 49% YoY for FY20 given higher short term borrowings to cover for the circular debt.
Other operating expenses were down by 44% YoY for the quarter. On a yearly basis, absence of exchange losses to the tune of Rs3.1bn last year helped in reducing the operating expenses by 14% YoY in FY20.
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.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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