160% dividend as PSO maintains top slot among OMCs

KARACHI: The Board of Management, Pakistan State Oil (PSO), on Thursday, April 27, 2006, reviewed the company performance during the third quarter ended March 31, 2006. Mr. Pervaiz Kausar, Chairman, BoM, presided over the meeting.

During the nine-month review period of July-March 2006, the company sales revenue touched Rs 236 billion. Consequently, PSO recorded profit before tax of Rs. 7.1 billion, up by 6% over the corresponding period, and profit after tax of Rs 4.6 billion, up by 7% over the same period last year.

Based on this financial performance, the Board of Management announced a cash dividend of Rs 5/- per share to its shareholders. Combined with the earlier declared interim half-yearly dividend of Rs 11/-, the total dividend comes to Rs 16/- per share for the first nine months of FY06.

The quarter under review witnessed the highest-ever prices of petroleum products in the international market due to the supply concerns as a result of the current geo-political situation.

High prices of petroleum products in the country have resulted in a decline in consumption in all fuel categories. In White Oil – motor gasoline and high speed diesel – usage reduced by 11% and 4% respectively. In Black Oil, the furnace oil consumption dropped by 14% as natural gas was effectively utilized by the industrial sector, including power generation units.

Effective March 16, 2006, the federal government revised the regime for OMC’s distributor margin and dealer commission, resulting in the margins on all regulated fuels declining by about 20%. This will result in reduction in the future earnings of the oil marketing companies.

PSO continued to improve its retail marketing position in gasoline and CNG with the introduction of value-added products and services like PSO Privilege Loyalty Card, CNG Plus Oil, etc. Promotional campaign of PSO’s Castrol brand of lubricants is successfully continuing. The company also continued its corporate social responsibility (CSR) initiatives by, among others, co-sponsoring the India-Pakistan cricket series and actively participating in the Expo Pakistan 2006.

The earnings during the period were affected by higher financial cost due to significant outstanding receivables from the government. Efforts are continuing for early recovery to reduce further impact on profitability and cash flow of the company.

The Board of Management complimented the management, employees, customers and other stakeholders for the company’s good performance in the prevailing fiercely competitive environment, and expressed confidence that with prudent initiatives, PSO will continue to maintain its leadership in the oil marketing sector.