KARACHI: Pakistan State Oil (PSO) posted a profit-after-tax (PAT) of Rs10 billion during the first half of this fiscal year ending on Dec 31, 2016, translating into earnings per share at Rs36.90.

It represented a growth of 49pc over the PAT at Rs 6.7bn and eps at Rs24.8 in the same period last year. The results were better than expected but the company board did not announce an interim cash dividend, which was a damper on investor sentiments as the oil marketing compnay’s stock price fell 2.89pc.

Analyst Waleed Rahmani at Arif Habib Ltd reckoned that the company skipped the interim dividend “amid cash crunch it is facing due to rising circular debt”.

Sales during the July-December period amounted to Rs411.3bn, up 16pc over the sales of Rs354.0bn for the 1HFY2016. Gross profit rose 28pc to Rs17.8bn, from Rs13.8bn, while other income contribution surged 20pc to Rs6.32bn, from Rs5.26bn.

Analyst Umair Naseer at Topline Securities noted that strong sales and higher other income were the key earnings driver for PSO during 2QFY17. Higher oil volumes and oil prices mainly led sales growth, whereas ‘other income’ saw sharp increase likely due to penal income (markup on delayed payments to PSO).

The company’s oil volumes grew 22pc to 3.7m tonnes in 2QFY17, up 22pc year-on-year. Other operating expenses were higher by 10pc in line with expectations as exchange rate remained stable during the quarter. However, lower finance cost also contributed to the earnings growth.

Published in Dawn February 7th, 2017