PSO Improves Market share and Sales Revenue

The Board of Management of Pakistan State Oil reviewed the unaudited financial information for the nine months ended March 31, 2009. Sardar Yasin Malik, Chairman, Board of Management, PSO presided over the meeting.

The third quarter performance of the company shows a positive picture primarily due to stabilized oil prices at the level of $ 50 per barrel, which once saw a peak of $ 141 per barrel of the OPEC basket of crude during July 2008. As a result of stable oil prices, the company was able to post improved quarterly after tax earnings of Rs 780 million as compared to the losses incurred during the past two quarters due to inventory losses. However, the loss for the nine months period stood at Rs 9.3 billion versus profit of Rs 8.5 billion earned in the comparative period of last year. The low quarterly profit is mainly due to the impact of high financial cost on bank borrowings obtained to finance the circular debt.

In the period under review, the country went through a recessionary phase during which consumption of white oil products experienced a decline of 8% as compared to the same period of last year. However, industry consumption of black oil, which is primarily used by power sector increased by 2%. PSO sold 9.5 million tons of POL products, translating into a sales turnover of Rs. 540 billion – an increase of 37%. This enabled the company to improve its market share to 71.7% as compared to 70.1% during the same period last year. PSO also enhanced its fuel oil supplies to the power sector and consequently improved its market share from 82.9% to 86.7% in this product segment which is playing a pivotal role in generation of electricity for the country.

To resolve the circular debt issue pertaining to the power sector, the National Transmission and Dispatch Company, an entity of Government of Pakistan issued Term Finance Certificates of Rs 80.15 billion on March 31, 2009; your company was extended an amount of Rs 44.4 billion to settle its liabilities to the refineries. As a result the company’s power sector receivables dropped to Rs 54.4 billion which at one time reached over Rs 100 billion towards the end of the quarter.

PSO was recently recognized among the top business enterprises of the Muslim world with its 29th ranking in the “5th Annual Dinar Standard List of Top 100 Companies”. The DS 100 ranking benchmarks the corporate environment of organizations in the 57 OIC (Organization of Islamic Conference) member countries. This ranking for PSO is an improvement from last year when it was ranked 32nd.
The Board expressed its gratitude towards Government of Pakistan for its efforts in solving the circular debt issue and hoped that through the support of Ministry of Petroleum & Natural Resources and Ministry of Finance, the company will overcome all the challenges imposed by different domestic and international factors.