KARACHI: Pakistan State Oil Company Limited (PSO) posted an after-tax profit of Rs5.2 billion, translating into earnings per share (eps) of Rs19.3, for the first quarter (July-September) of this fiscal year.

The results declared by the company’s board on Tuesday showed a fall of 33pc from profit of Rs7.8bn (eps: Rs28.7) in 1QFY14.

“That said, the company’s 1QFY15 result came as a surprise where it beat the street consensus of eps at Rs7.50 to Rs8 by a massive 2.5 times,” commented investment analyst Asad I. Siddiqui at AKD Securities. “Despite declining sales, the company improved its gross margins to 4 per cent over 3.87pc last year.”

The market reacted positively to the results, with PSO stock value gaining Rs6.37 on Tuesday to close at Rs349.22.

In a press statement PSO stated that the company’s Rs5.2bn profit after tax (PAT) was “59pc higher than the budgeted PAT of Rs3.3bn” for the quarter.

The budget was based on the fact that bulk of interest income from IPPs received in the first quarter of last year was expected to be received in a steady stream on a sustainable basis during this year. Therefore, PAT including interest income from IPPs was lower than that during the same period last year (Rs5.2bn vs Rs7.8bn).

However, profit from operations (excluding IPP interest income) was Rs 9.11bn, 39pc higher than Rs6.55bn last year, the company said.

The company said it had retained its market leadership in Black Oil and White Oil, and met the demand of fuel across the country “despite the hardships and supply chain disruptions”.

Accordingly, the turnover of Rs355bn during July-September period was 5pc lower than Rs364bn a year earlier, largely due to the effects of circular debt, floods and civil disturbance in certain areas on the retail network of PSO.

Fauji Cement: Fauji Cement Company Limited (FCCL) also announced its first-quarter results on Tuesday, posting PAT of Rs602 million (eps: Rs0.44), a growth of 5pc from Rs582m profit (eps: Rs0.42) a year ago.

“Enhancement in the top-line was exhibited due to YoY (year-on-year) increment in both the cement prices and the total dispatches,” stated analyst at brokerage Taurus Securities.

Despite the weakening of coal prices, cost of goods sale exhibited a comparatively higher YoY growth of 9pc, primarily due to the electricity tariff hike effective after the 1QFY14.

Resultantly, the gross margin stood down to 31.9pc in 1QFY15, from 32.7pc during the same quarter last year. Moreover, as a result of YoY increase in every individual expense head, along with a reduction in the other income, growth in the bottom line remained restricted to 3pc YoY. Effective tax rate clocked in at 31.6pc during 1QFY15 against 30.3pc in 1QFY14.

During 1QFY15, sales revenue of the FFCL rose by 8pc to Rs4.2bn amid higher retention prices.

Nishat Power Limited: The company posted an after-tax profit of Rs792m (eps: Rs2.24) during the July-September quarter, a growth of 46pc from 542m (eps: Rs1.53) a year earlier.

Analyst Sharoz Hameed at Global Securities observed that the primary reason for the increase in NPL’s earnings was probably higher expected penal interest income as a result of piling up of overdue receivables.

On a quarter-on-quarter (QoQ) basis, the company reported an increase of 2pc in earnings during July-September compared to Rs774m (eps: Rs2.19) during April-June 2014.

“Increase in earnings on a QoQ basis is likely due to a slightly higher rupee-dollar exchange rate resulting in an improvement in indexation factor,” an analyst said.

Published in Dawn, October 29th , 2014