Pakistan State Oil Records a Drastic 93% Drop in Annual Net Profit

Pakistan State Oil Records a Drastic 93% Drop in Annual Net Profit

Karachi, August 23, 2023 – Pakistan State Oil (PSO) has reported a staggering 93 percent decline in its profit after tax for the fiscal year ending on June 30, 2023.

According to unconsolidated financial statements submitted to the Pakistan Stock Exchange (PSX), the company posted a profit after tax of Rs 5.66 billion for the year ending June 30, 2023, compared to Rs 86.22 billion in the previous fiscal year. This substantial reduction in profit has raised concerns among investors and stakeholders.

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The earnings per share (EPS) also experienced a sharp decline, falling to Rs 12.02 for the fiscal year 2022-2023, compared to Rs 183.66 in the previous year, indicating a significant drop in the company’s profitability.

In response to these financial challenges, the board of management convened on August 23, 2023, and approved a final cash dividend for the financial year ending June 30, 2023, at the rate of Rs 7.50 per share, equivalent to 75 percent of the face value of the share. This dividend may offer some respite to the company’s shareholders.

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The financial statements reveal that the high cost of production for the products sold by PSO significantly impacted its profitability. The gross profit of the company was recorded at Rs 74.85 billion for the fiscal year 2022-23, down from Rs 161 billion in the preceding fiscal year, indicating the challenges faced by the company in maintaining profit margins.

Furthermore, distribution and market expenses incurred by the company rose to Rs 15.23 billion for the year ending June 30, 2023, compared to Rs 12.63 billion in the previous year. This increase in operational expenses added to the overall financial strain experienced by PSO.

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Despite the rise in distribution and market expenses, the company managed to reduce its total expenses to Rs 22.79 billion for the fiscal year under review, as compared to Rs 33.92 billion in the preceding year. While this cost reduction is a positive development, it was not enough to offset the broader challenges impacting PSO’s financial performance.

The drastic decline in PSO’s annual net profit highlights the need for a comprehensive strategy to address the underlying issues affecting the company’s profitability. Stakeholders and industry analysts will be closely monitoring PSO’s financial and operational measures to navigate these challenging times and work towards a more stable financial future.

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