ISE lauds PSO for all time high revenue: Rs 21.8 billion profit after tax earned September 26, 2014 RECORDER REPORT 0 CommentsE-mailPrintPDF The management and board of directors Islamabad Stock Exchange (ISE) Thursday lauded the brilliant performance of state-owned oil marketing company Pakistan State Oil (PSO) over its all time high revenue in 2013-14, as the company earned a profit after tax of Rs 21.8 billion against Rs 12.6 billion last year. The representatives of ISE raised queries about the deregulation of oil business during a briefing by Chief Executive Officer (CEO) PSO Amjad Parvez Janjua and Chief Financial Officer (CFO) Sohail Butt at the ISE here on Thursday. The officials of the PSO highlighted the Companys high performance during FY2014. As PSO, we have no issue on deregulation, CEO PSO Amjad Parvez Janjua said adding we will give professional input if opinion was sought. The representatives of Stock market said that dealers and Oil Marketing Companies commission was low which made oil business unviable. ISE representatives also appreciated the efforts of the company to make all high time profit in financial year 2014. PSO CEO Amjad Parvez Janjua informed the ISE that the company was the highest contributor of duties and taxes in the national exchequer during FY2014. During the year, the Company earned a profit after tax of Rs 21.8 billion against 12.6 billion last year and crossed Rs 100 billion mark of market capitalisation to be one of the few large cap companies on the Stock Exchanges of Pakistan, he said. Sharing the way forward and strategic objectives, PSO CEO informed that the company would retain leadership position in oil market and establish PSO as a brand of choice for customers. It would maximise return to shareholders and fulfil responsibilities as a responsible corporate citizen towards a wider group of stakeholders including the society and community at large. It would pursue profitable growth and rationalise product portfolio with a focus on high margin products. It would optimise product procurement from local and international sources and pursue ensured access to long-term and cost-effective supply sources. It would also ensure safety of people, equipment and environment and pursue operational efficiency, cost-effectiveness and quality. It would ensure legal and regulatory compliance in all spheres of operations and new business development and pursue continuous improvement, innovation and technological advancement. It would enhance corporate capabilities and motivation through skill enhancement, management, he added. Janjua said PSO closed FY2014 with flying colors as it was a momentous year in PSOs operating history when the Company recorded all time high sales revenue, operating profit, after tax earnings and market capitalisation. The Company is now on Forbes 2000 list of worlds biggest publicly traded companies. He said the Company crossed Rs 1.4 trillion mark in sale revenue and retained leadership in oil market of Pakistan with 73 percent share in Black Oil and 53 percent share in White Oil. He said that based on detailed due diligence, PSO had devised and implemented a strategy to pursue profitable growth while rationalising its product portfolio. Accordingly, the Company merged critical aspects of both internal financial review and external market reconnaissance to strike an effective balance between volumetric sales and profitability, whereby offers of sales incentives viz-a-viz discounts were limited and focused on robustness of business cases, he said. This smart selling approach to achieve the objectives of market leadership and sales volume enhancement, with due consideration to bottom-line and liquidity position, he said, enabled the Company to achieve profitable growth during the year. PSO Chief highlighted that the Company crossed Rs 1.4 trillion mark in sale revenue and retained leadership in oil market of Pakistan with 73 percent share in Black Oil and 53 percent share in White Oil. Elaborating on the business model followed by the Company in FY2014, the MD PSO stated that the company had devised and implemented a strategy to pursue profitable growth while rationalising its product portfolio. Accordingly, the Company merged critical aspects of both internal financial review and external market reconnaissance to strike an effective balance between volumetric sales and profitability, whereby offers of sales incentives viz-a-viz discounts were limited and focused on robustness of business cases. This smart selling approach to achieve the objectives of market leadership and sales volume enhancement, with due consideration to bottom-line and liquidity position, enabled the Company to achieve profitable growth during the year. PSO DMD (Finance & IT) Sohail Butt in his presentation stated that the Company achieved all time high performance benchmark without any increase in margins during the year. He stated that gross profit increased due to marketing performance, smart selling and profitable growth initiatives as well as cost efficiency achieved by the Company. He highlighted that marketing, distribution and administrative expenses merely increased by three percent against an average increase of 14 percent during the last 3 years and against inflation of 8.5 percent during the year. Besides, the effective mark-up rate was brought down from 11 percent to 8.5 percent, and against increase of average short term borrowings of 50 percent, the mark-up cost only increased by 26 percent. Butt further stated that the normal profit after tax excluding IPP interest income and other extraordinary items increased by 31 percent on Year on Year (YoY) basis whereas last year it was negative seven percent on YoY basis. He added that the Companys market capitalisation increased by 34 percent to Rs 106 billion as on June 30. PSO ended with the highest ever net profit of Rs 21.8 billion with unprecedented YoY growth of 73 percent. Consequently, the Company made highest ever contribution to the Government exchequer in the form of taxes, duties and levies of Rs 289 billion during FY2014. PSOs outlook was upgraded by PACRA from Stable to Positive with AA+ and A1+ long and short term credit ratings. Based on PSOs extraordinary performance, the investment analysts have highly rated the Company. Majority of the analysts have given Buy or Outperform recommendations for PSO. He added that PSO stock offers an attractive investment opportunity. Mian Ayyaz Afzal, MD ISE said ISE was the prominent exchange that had been catering the investment needs of the investors of the northern parts of the country. He said ISE was focusing on development of small medium enterprises (SMEs) and it had also started an extensive investor education program for awareness of general public about the capital market. MD ISE desired that ISE will be pleased to have co-operation of PSO for the said causes. Mian Ayyaz Afzal appreciated the performance of PSO and thanked the CEO of PSO for visiting the ISE. Copyright Business Recorder, 2014
Posted on: Sat, 27 Sep 2014 16:12:44 +0000
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