{"id":8032,"date":"2025-03-05T00:38:49","date_gmt":"2025-03-04T19:38:49","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=8032"},"modified":"2025-03-05T00:39:04","modified_gmt":"2025-03-04T19:39:04","slug":"pso-2qfy25-earnings-strengthening-liquidity","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/pso-2qfy25-earnings-strengthening-liquidity\/","title":{"rendered":"PSO 2QFY25 earnings: strengthening liquidity"},"content":{"rendered":"\n

Pakistan State Oil Ltd. (PSO)<\/a><\/strong> has released its 2QFY25 earnings report, showing significant improvement in profitability despite a challenging market environment. The company reported a profit after tax (PAT) of PKR 7.2 billion, translating to an EPS of PKR 15.4 for the quarter. This marks a strong recovery from the loss after tax (LAT) of PKR 14.1 billion in the same period last year (SPLY). <\/p>\n\n\n\n

However, earnings fell slightly short of analyst expectations of PKR 8.4 billion (EPS: PKR 17.9). The company\u2019s net profit for 1HFY25 stood at PKR 11.2 billion, representing a remarkable 44% year-on-year (YoY) growth. Despite this financial turnaround, PSO opted not to distribute a half-yearly dividend, contrary to market expectations.<\/p>\n\n\n\n

Key financial highlights<\/strong><\/h3>\n\n\n\n
    \n
  • Revenue decline, but higher OMC offtakes<\/strong>: Net sales for 2QFY25 stood at PKR 838 billion, reflecting an 8% YoY decline. The drop was primarily due to lower fuel prices compared to SPLY. However, the company recorded a 7% YoY increase in Oil Marketing Companies (OMC) offtakes, totaling 2.1 million tons.
    <\/li>\n\n\n\n
  • Gross profit rebounds strongly<\/strong>: The company\u2019s gross profit surged to PKR 25 billion, with a gross margin of 3.0%, a stark contrast to the gross loss of PKR 3.2 billion in SPLY. This improvement stemmed from higher regulated margins and the absence of inventory losses that impacted results last year.
    <\/li>\n\n\n\n
  • Other income supports profitability<\/strong>: Other income declined 9% YoY to PKR 7.1 billion but witnessed a significant 118% increase on a quarter-on-quarter (QoQ) basis. This increase was driven by higher short-term investment returns and the recognition of Late Payment Surcharge (LPS) receivables from past-due customer receipts.
    <\/li>\n\n\n\n
  • Finance cost drops sharply<\/strong>: A key positive takeaway from the results was a sharp 42% YoY reduction in finance costs to PKR 8.8 billion. This marks the lowest level in eight quarters, largely due to a reduction in short-term borrowings and a favorable decline in interest rates.
    <\/li>\n\n\n\n
  • Higher taxation impacting earnings<\/strong>: The company booked an effective tax rate of 53% in 2QFY25, significantly higher than the 13% recorded in SPLY. This elevated tax rate impacted overall earnings but did not derail profitability.
    <\/li>\n<\/ul>\n\n\n\n

    Investment perspective<\/strong><\/h3>\n\n\n\n

    Despite the volatility in the energy sector, PSO\u2019s strong financial performance highlights its ability to navigate market challenges effectively. The company has demonstrated resilience through improved margins, cost-cutting measures, and better financial management. Analysts at AKD Securities have assigned a \u2018BUY\u2019 rating to the stock, with a target price (TP) of PKR 729 per share by December 2025, implying an upside potential of 100% from the last closing price.<\/p>\n\n\n\n

    Outlook<\/strong><\/h3>\n\n\n\n

    PSO\u2019s ability to sustain this growth trajectory will depend on maintaining strong sales volumes, optimizing financial costs, and leveraging favorable economic conditions. While the absence of a dividend may be disappointing for income-focused investors, the company\u2019s strategic emphasis on liquidity and capital efficiency suggests a long-term growth strategy.<\/p>\n\n\n\n

    With improved operational metrics and a positive earnings outlook, PSO remains a compelling investment opportunity in Pakistan\u2019s energy sector.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Pakistan State Oil Ltd. (PSO) has released its 2QFY25 earnings report, showing significant improvement in profitability despite a challenging market environment. The company reported a profit after tax (PAT) of PKR 7.2 billion, translating to an EPS of PKR 15.4 for the quarter. This marks a strong recovery from the loss after tax (LAT) of PKR 14.1 billion in the same period last year (SPLY)<\/p>\n","protected":false},"author":9252,"featured_media":6984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,155],"tags":[166],"class_list":["post-8032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-fundamental-analysis","tag-pso"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/PSO-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/PSO-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/PSO-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/PSO-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/8032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=8032"}],"version-history":[{"count":0,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/8032\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/6984"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=8032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=8032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=8032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}