Pakistan State Oil profit up 176 percent

KARACHI (October 29 2002) : Pakistan State Oil's profit in three months up to September 30, 2002, recorded a tremendous growth of 176 percent where its sales revenue was over Rs 48 billion.

The Board of Management, Pakistan State Oil, met on Monday to review the performance and accounts for the first quarter ended September 30, 2002. M Salim, Chairman, BoM, presided over the meeting.

The Board observed that the company continued to further improving on its preceding year's performance and achieved newer landmarks. During the first quarter of FY-03, PSO sold 2.6 million tonnes POL products, translating into sales revenues of over Rs 48 billion, up by 12 percent over the prior year period.

Profit before tax rose to Rs 1.4 billion, registering an impressive growth of around 143 percent over the same period last year, whereas profit after-tax soared to Rs 1.05 billion, up by 176 percent. This remarkable and impressive performance demonstrated by the company was mainly due to increased operating efficiency, more concentration on higher margin products, further expansion of new product line and services and enhanced margins.

During July-September 2002, the domestic POL industry displayed a modest growth of 1 percent, which was essentially the same growth witnessed during the second half of FY-02. The political stability in the country, coupled with economic revival, led to consumption growth of key products.

In July-September 2002 Mogas, HSD and JP1 showed growth of 3 percent, 12 percent and 26 percent respectively. However, FO demand decreased by 13 percent, owing to improved hydel generation and low product off-take by IPPs and Hubco.

PSO consolidated its position as the market leader in the industry despite intensifying competition in the wake of deregulation, impediments from cartage contractors and arrival of new entrants.

During the first quarter of FY-03, PSO increased its market participation in Mogas to 41.7 percent (an increase of 2 percent) over the prior year period, while in HSD the company showed significant growth of 14 percent in sales volume, thus increasing its share to 59.5 percent (an increase of 1.3 percent).

Similarly, in JP 1, PSO sales grew substantially by 31 percent compared to the same period last year, increasing its market share by 3 percent to 71 percent. However, in fuel oil PSO sales declined owing to general decline in the overall industry.

The deregulation and privatisation of oil & gas sector remained the top priority of the government. As part of its staged deregulation of downstream sector, the government mandated OMCs to announce their product price on fortnightly basis with the margin remained capped at 3.5 percent. With the enhancement in POL product margins from July 1, 2002, OMCs have strengthened their financial health, which would lead to further investment and improved services.

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