Pakistan State Oil announced a net profit of PKR 1.9 billion for the Q1 of fiscal year 2009 to 2010 which marked a recovery from severe losses the company faced in the previous year. It declared a cash dividend of PKR 3 per share for the quarter.

It said that the profit reflected the stability in international oil prices, which had plunged over the last year. The Q1 of fiscal 2010 saw oil prices moving across a narrow band ranging between USD 60 and USD 73 per barrel, adding revenue at PKR 201 billion was lower than previous year’s PKR 222 billion because of the reduction in retail prices of petroleum products.

It also underlined the persistent negative impact of piling up of circular debt on the earnings. It is worth mentioning that on account of circular debt, the company had to borrow from banks thereby incurring financial charges of PKR 1.6 billion which dented the profitability during the period under review.

PSO’s receivables under the inter corporate circular debt crossed PKR 100 billion during the quarter adding the company has received PKR 41.3 billion which allowed it to make partial payments to refineries and retire LC payments against oil imports. It said that due to the increase in supply of furnace oil to the power sector and delayed payments from them, the receivables are growing on a daily basis once again.

(Sourced from the News)