Pakistan State Oil Company Limited (PSO) announced its financial result for 3QFY21 whereby the company declared a profit after tax (PAT) of PKR 8.7bn (EPS: PKR 18.57) compared to a loss of PKR 3.4bn (LPS: PKR 7.30) in 3QFY20. The jump in earnings is due to 53% YoY growth in volumes and company recording inventory gains of PKR ~7bn in 3QFY21 compared to an inventory loss of PKR 4.5bn in 3QFY20, we view. This takes 9MFY21 profit after tax (PAT) to PKR 18,242mn (EPS: PKR 38.86) compared to PKR 3,008mn (EPS: PKR 6.41) during SPLY, up 506% YoY.
The Topline of the company settled at PKR 285.5bn for 3QFY21, up by 17% YoY. The jump in sales is due to massive growth in overall sales volumes by 53% YoY (MS, HSD and FO volumes increased by 28%. 50% and 260% YoY) to 2.03mn tons in 3QFY21. During 9MFY21, the topline witnessed a decline of 4% YoY to PKR 853bn due to lower petroleum product prices which offset the impact of growth in overall volumes by 21% YoY.
Pakistan State Oil posted a gross profit of PKR 17.3bn with gross margins set at 6.04% in 3QFY21 compared to 1.01% in the prior year. We view noteworthy changes in ex-refinery prices that resulted in inventory gains of PKR ~7.0bn in 3QFY21 compared to inventory loss of PKR 4.5bn in the same period last year.
9MFY21: Profitability increased by 506% YoY
Other operating income decreased by 43% YoY to PKR 740mn in 3QFY21. We reckon that decline in other income is on the back of lower markup on delayed payments in the period under review.
Meanwhile, finance costs nosedived by 73% YoY to PKR 1,064mn which is owing to lower reliance on borrowings and a decline in interest rates.
The company recorded effective taxation at 32.5% in 3QFY21 compared to tax reversal on 3QFY21.