Pakistan State Oil’s (PSX: PSO) earnings have jumped by more than 50 percent in 1HFY20, while the latest quarter (2QFY20) has seen a staggering increase of over 40 times increase in earnings on a year-on-year basis.
With cost of sales having around 97 percent share in revenues, changes at the top are profound for the OMC giants. In the period under consideration, likely decrease in inventory losses versus a weaker 2QFY20 in terms of staggeringly high inventory losses has overall been key in lifting the company’s earnings.
Moreover, PSO has been seen regaining lost market share in recent months and growth in volumes, which has also contributed to the company’s topline. In 1HFY20, PSO’s overall market share increased by 4.8 percent, while its overall liquid volumes also increased by 4.4 percent versus a negative growth of 6.5 percent of the industry.
What also supported PSO’s bottomline was the growth in other income constituting mostly of penal income or late payment surcharge, which helped PSO absorb the jump in finance cost.
At the same time, PSO also benefitted from exchange gains in 1HFY20 where the currency appreciated by 1 percent, versus exchange losses in the previous period.