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PSO imports, refinery production up, PAT rises in first 9 months

International oil experts calculated that worldwide oil demand to increase by almost 1.45 million bpd during 2019, following predicted growth of 1.65 million bpd for 2018. It is also said that this year, total world oil consumption is predicted at 98.85 million bpd, while the annual average worldwide consumption during 2019 is anticipated to surpass the 100 million bpd threshold.

Balance Sheet Of PSO
 Details201720162015201420132012
Shareholders’ Equity102,85091,58182,31078,62160,64348,334
Non Current Assets22,88368,06465,55958,63757,59310,469
Current Assets368,560274,255275,749313,514224,356337,796
Total Liabilities289,593250,737258,997293,530221,307299,931
Source: PSO

Europe is expected to see an expansion, albeit at a slower pace, as economic growth projections ease slightly, while Asia-Pacific oil demand is seen weakening in light of planned substitution programs. Furthermore, demand for OPEC’s crude oil is predicted to average 32.2 million bpd in 2019, down by almost 800,000 bpd from 2018. Non-OPEC oil supply is predicted to increase by 2.1 million bpd year on year in 2019, generally unchanged from 2018, primarily because of higher production in North America and new project ramp-ups in Brazil, while Mexico, Norway, and China are predicted to lead the non-OPEC supply falls on the back of absence of new projects and heavy falls in mature fields.

In Pakistan, Pakistan State Oil Company Limited (PSOCL) is the most trusted Oil Marketing Company of Pakistan and has earned that status by delivering the best fuel products to their customers in the hardest of situations. The launch of Altron X Hi-Octane 97 is yet another testament to PSO’s commitment to effectively meeting the changing needs of their consumers with fuel products that are at par with global standards. While the management caters to the evolving fuel needs of contemporary vehicles, the company’s new higher RON fuel products also ensure lower emissions, responding positively to the urgent need for environment-friendly fuels. In addition to environment preservation, the cleaner fuel also means a cleaner and healthier engine which would drastically decline the cost of maintenance.

The company has reviewed the performance for the period nine months from July to March for financial year 2017-18 (9MFY2018). During the period it is mentioned that PSO imported 66 percent of total industry imports and refinery upliftment was 37 percent of total country refinery production (10 percent volumetric increase over the same period last year). The management also continues to approach relevant authorities on the matters pertaining to reduced product supply, ban on development of new outlets, uniform exchange rate for pricing of imported POL products, issue of fuel adulteration and delay in settlement of IFEM receivables FY2012-17. These matters are of prime concern and impacting company’s market share and profitability.

 

The management is continuously pursuing with MoE/MoF for their due intervention for injection of funds in order to settle the said outstanding receivables also payment for FO and LNG supplies of Rs. 130 billion planned to be made in the quarter April-June 2018.

It is also mentioned in the report that PSO recorded Profit After Tax (PAT) of Rs 13.2 billion in 9MFY18. Gross profit explained a growth of 6.9 percent despite fall in furnace oil volumes as a result of government decision to shift power production towards RLNG. However, PAT fall by 6.6 percent because of reduction in other income owing to maturity of interest yielding PIBs in July 2017 and higher tax incidence on LNG business. PACRA maintained June 2017 long-term rating of Pakistan State Oil Company Limited as AA while short term rating as A1+ with a stable outlook.

The financial report of the company also explained that the management paid higher tax by Rs. 1 billion approximately on LNG during the period under review ended March 31, 2018, resulting in overall effective tax rate of 35 percent against prevailing corporate tax rate of 30 percent. The financial report of the company also recorded that PSO has managed to get additional funds of Rs. 23 billion in the month of March, bringing down the outstanding receivables from the power sector, PIA and SNGPL as of March 31st, 2018 to Rs. 304 billion as against Rs. 313 billion as of December 31, 2017. No doubt, PSO as nation’s largest energy company has been striving to assist national economy by building and improving a wide-spread retail network with the support of a well-organized storage and supply infrastructure.

Yearly analysis

The company’s statistics also recorded that as of June 30, 2017, variation as against to FY 2016 is; shareholders equity grew by Rs 11.3 billion because of net retained income generated during the year, total non-current assets declined by Rs. 44.3 billion chiefly because of the reclassification of PIB Investment into current assets account of maturity in July 2017, the current assets grew by Rs. 94.4 billion primarily because of; rise in stock in trade by Rs. 15.5 billion owing to higher stock levels and upward trend in foreign oil prices, reclassification of PIB Investment into current assets by Rs. 43.9 billion on account of maturity in July 2017, rise in trade debts by Rs. 34.4 billion mainly because of rise in receivables of power sector, PIA and SNGPL as against to previous year. The source also mentioned that the total liabilities grew by Rs. 38.9 billion mainly because of rise in short-term borrowings, trade and other payables and retirement and other service benefits.

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