In a fast changing, pandemic, lockdown world, Pakistan State Oil (PSO) beat all odds. A record breaking performance that demonstrates PSOs resilience and strength as it continues to transform and evolve into an agile organization. PSO announced a record breaking gross revenue of PKR 1.4 trillion and highest ever profit after tax of PKR 29.1 billion for the financial year 2020-21 (FY21) after a loss after tax of PKR 6.5 billion in the preceding year. The net profit translated into a healthy earning per share of PKR 62.07 vs. loss per share of PKR 13.77 in FY20.
The announcement came after PSO’s Board of Management (BoM) reviewed the performance of the company together with its subsidiary Pakistan Refinery Limited (PRL) for the financial year 2020-21, ended on June 30, 2021, during the meeting held on August 23, 2021 in Islamabad.
Based on the outstanding financial and operational performance of the company, the Board of Management has announced a final dividend of PKR 10/- per share (100%) which is in addition to the interim cash dividend of PKR 5/- per share (50%) for financial year 2020-21. The dividend for the financial year stands at PKR 15/- per share (150%). PRL, a subsidiary of PSO, also reported a profit after tax of PKR 0.94 billion during the year compared to a loss of PKR 7.6 billion in the previous year. On a consolidated basis, the group achieved a profit after tax of PKR 29.6 billion in FY21 compared to loss after tax of PKR 14.8 billion in FY20.
The Board noted that these results have demonstrated PSO’s agility and strength across its diverse portfolio despite the challenging economic scenario and recurrent waves of the pandemic. PSO is leading the market by a large margin, delivering a phenomenal performance over and above the industry average. The company exhibited an outstanding growth of 21.9% in liquid fuels over last year with volumes reaching 9.2 million tons, attaining a market share of 46.3% in FY21 compared to 44.3% in FY20. PSO also achieved its highest ever volume of 7.6 million tons in the white oil segment despite the shrinking jet fuel and kerosene oil industry, with a market share of 45.2% in FY21 vs. 44% in FY20 i.e. a growth of 120 basis points (bps).
PSO set an all-time high record in Motor Gasoline (MoGas) achieving volumes of 3.5 million tons, an increase of 21.2% from FY20, translating into market share of 41.3% vs. 38.7% last year – an increase of 260 bps. The company made a strong closing in Hi-Cetane Diesel as well, achieving a volumetric growth of 21.1% vs. industry growth of 17.5%, translating into volumes of 3.7 million tons in FY21. The volumes contributed in regaining market share, bringing it to 47.2% vs. 45.8% in the preceding year i.e. an increase of 140 bps. PSO attained a volumetric growth of 53.2% in black oil with volumes of 1.7 million tons and a market share of 51.7% vs. 46% in FY20.
In line with GOP’s clean and green initiative, PSO was the first OMC to upgrade the country’s fuel standard from Euro 2 to Euro 5. The launch of Hi-Octane 97 Euro 5, Premier Euro 5 and Hi-Cetane Diesel Euro 5 proved to be game changers in the industry, bolstering customer’s confidence in PSO’s products. Building on its value creation model, the company prioritized high margin products i.e. High-Octane 97 Euro 5 and lubricants adding significant revenues with a volumetric growth of 177.6% and 11.3% respectively compared to last year. PSO’s first EV charging facility – Electro was also launched in Islamabad.
This performance is also a strong indicator of the change and transformation going on within PSO. With a focus on innovation and technology, PSO continued to enhance its digital capabilities to drive growth and enhance efficiency. The company made significant strides on its journey of digital transformation with the launch of Pakistan’s first digitally integrated oil storage & dispatch terminal in Karachi. PSO also became the first public sector entity to launch e-procurement through SAP Ariba. Other automation initiatives included the launch of PSO Sahulat – an online order management system for dealers, Automated Queue Management System for tank-lorries and internal applications for fund management and employees leave management.
The company fast tracked infrastructural projects to gain operational efficiency. 174,000 tons of new and rehabilitated storages were added which significantly increase the number of day’s cover of petroleum products. Pipeline links have been completed to connect operational locations with White Oil Pipeline to make product movement safer and more efficient. 71 new vision retail outlets were also added to the company’s footprint.
Living up to its promise of keeping the wheels of the nation’s economy in motion and ensuring a seamless supply of fuel, the company imported 4.9 million tons of white oil products, an all-time high since the inception of the company. PSO has also played a pivotal role in the LNG sector. The company entered into another agreement with Qatar Petroleum under G2G arrangement to supply an additional 3 million tons of LNG for a period of 10 years. This contract shall add additional volumes to an already executed 15-year long term sales purchase agreement (SPA), making PSO the largest supplier of LNG in the country with a supply base of 6.75 million tons per annum.
With the burden of circular debt still large, to improve its balance sheet further, PSO recovered PKR 25.8 billion from the Power Sector along with late payment surcharge income. Reduction in finance cost by Rs. 3.2 billion. (24%) further complemented the profitability of the company.
As a responsible corporate citizen, PSO, through its PSO CSR Trust extended support of PKR 102 million in the fields of healthcare, education, community-building, environment, and disaster relief nationwide. The company also launched a massive nationwide campaign to spread awareness about the vaccination and inoculate citizens in all corners of the country by setting up approx. 500 vaccination centers and mobilizing 100 mobile vaccination vans.
The management expressed sincere gratitude to all stakeholders including customers, the Government of Pakistan, specifically the Ministry of Energy, PSO’s Board of Management, employees, and shareholders for their continued support.