AKD Securities Limited – Off the Analyst’s Desk (August 26, 2022)

Karachi, August 26, 2022 (PPI-OT): PSO: FY22 EPS clocked in at PkR183.6, (below expectations Review)

Pakistan State Oil (PSO) announced result for FY22 where company posted unconsolidated PAT of PkR86bn (EPS: PkR183.6) increasing by 196% against PAT of PkR29.1bn (EPS: PkR62) for FY22. For 4QFY22, PAT stood at PkR21.4bn (EPS: PkR45.7), increasing by 97%YoY against PAT of PkR10.9bn (EPS: PkR23.2) for 4QFY21.

The result came in lower than our expectations where major deviation occurred due to higher other expenses at PkR9.1bn against our expectations of PkR2bn. Another major difference occurred due to exorbitant tax of PkR32.9bn (effective 61%) for the quarter against our expectation of PkR27bn.

To note, significant inventory gains arose on the back of increasing oil prices where difference between ex-refinery prices of MS/HSD increased by 90/100% during the quarter on sequential basis. We expect inventory gains to have clocked in at PkR45bn vs our expectations of PkR51bn during the period.

Topline of the company increased by 157/59% YoY/QoQ during 4QFY22 supported by increasing prices of MS and HSD while company’s retail fuel volumes also increased by 29%/36% YoY/QoQ during the period.