August 04, 2006	Friday	Rajab 8, 1427

KARACHI, Aug 3: Pakistan State Oil Limited — the biggest oil marketing company in the country — announced better than analysts’ expected results for the year ended June 30, 2006 on Thursday, posting an after tax profit at Rs7.52 billion (earnings per share at Rs43.87). That represented 32pc growth over the earlier year’s after tax profit of Rs5.66 billion (eps: Rs32.98).

Most analysts were looking at the net earnings to range between Rs6.69bn to Rs7.21bn. The board declared final cash dividend at Rs18 per share, which took the cumulative payout to Rs34 per share for FY06. The payout also outwitted most analysts who forecast it to amount to somewhere between Rs13 to Rs16 per share.

Gross sales of the company surged by 39pc to Rs352.5bn for FY06, from Rs253.7bn the previous year. Analysts attributed growth in sales to higher furnace oil sales coupled with rise in domestic oil prices during FY06. “Due to higher international oil prices, PSO was likely to have benefited from heavy inventory gains in the 4QFY06. Alone in 4QFY06, PSO posted net earnings of Rs2.94bn (eps Rs17.1) as compared to Rs1.38bn (eps Rs8.1) in 4QFY05 - a growth of 111pc,” an analyst commented.

A statement released by PSO said that the earnings during the period were impacted by higher financial costs due to outstanding receivables from the government. However, better management of resources reduced the adverse impact on profitability and cash flow of the company.

The company observed that geopolitical and supply factors resulted in higher prices of petroleum products internationally causing a decline of consumption in all fuel categories. Diesel usage reduced by 4.6pc; motor gasoline by 10.5pc while increased power generation demand positively impacted on furnace Oil consumption by 11.4pc.

The company stated that new entrants in dynamically competitive petroleum sector significantly affected the market composition and posed challenges to the established OMCs. “It is worth noting that despite the increasing stiff competitive market situation, PSO again emerged as leader with 65pc share on overall basis,” the company press release stated.